In-work poverty causing misery as over half of low-paid parents forced to turn to food banks
- UK workers paid below the real Living Wage face severe hardship as prices rise.
- Many have no financial buffer to absorb higher costs or deal with emergencies.
- Housing costs in particular are putting pressure on household budgets.
- The financial strain takes its toll on workers’ wellbeing and relationships.
- News comes ahead of announcement of real Living Wage rates for 2025-2026.
New research from the Living Wage Foundation highlights the worrying position of the UK’s 4.5 million workers paid below the real Living Wage. The Life on Low Pay report, is based on polling of over 2,000 UK workers, and shows the devastating impact of low pay on people’s lives.
Severe hardship
The polling shows that 3 in 5 low-paid workers (59%) were forced to skip meals regularly, were unable to heat their homes, fell behind on bills or took out a pay-day loan to cover their essentials in the past year because of their level of pay. Two in five (42%) have been forced to use foodbanks, rising to over half (56%) of low-paid workers with dependent children.
A low paid worker who took part in one of the focus groups which formed part of the research said: “I’m really struggling to balance the bills, rent, food for the children and also for myself. Some sort of sacrifice is always happening”
The news comes after inflation has more than doubled since a low in September 2024, with food inflation, which impacts low-paid workers disproportionately as they spend more of their income on essentials, continuing to rise to over 5% last month.
No safety net
Low-paid workers have little to no financial buffer to absorb increased costs or deal with emergencies:
- Nearly half (45%) are not confident they could afford an unexpected but necessary cost of £200, like a boiler or washing machine breaking down.
- 1 in 4 (24%) have no savings at all.
- 1 in 5 (19%) have less than £10 left over each week after paying for essentials like food, housing costs and energy.
The impacts of having no spare cash for emergencies can be profound. One focus group participant told us that she went into debt for the first time ever because one of her Universal Credit payments was late, causing her to miss a rent payment. This affected her credit score, making it harder to secure the two-bed flat she needs to provide enough space for her and her teenage son.
Housing costs are a particular burden for low-paid workers, with 2 in 5 (38%) not confident that they will be able to afford other essentials after housing costs are covered each month, rising to nearly half (48%) of low-paid renters.
A downward spiral
With prices still much higher than when the cost-of-living crisis began, and the cost of essentials on the rise again, many low-paid workers feel that things are getting worse. One in three (32%) feel worse off than a year ago, and a similar proportion (31%) rarely or never feel optimistic about the future.
Wellbeing and relationships suffer
The financial strain on low-paid workers takes its toll on their wellbeing and relationships:
- 2 in 5 (41%) say it negatively affects their overall quality of life
- 2 in 5 (42%) say it makes their mental health worse and the same proportion say it makes their sleep worse.
- 3 in 10 (29%) say it makes their relationships with friends and family worse
- 1 in 5 (20%) say it makes their relationship with their children worse
Two in five low paid workers (40%) can rarely, or never, afford extracurricular activities for their children, with one focus group participant saying that she had stopped taking her children on days out because they would ask for things like ice creams that she couldn’t afford.
Another said that not being able to buy nice things for her children made her feel like a bad parent, which took a heavy toll on her wellbeing: “When you see children have a nice life and everything, you think ‘where did I go wrong?’, so it really affects you, mentally and emotionally.”
Taking on extra work brings sacrifices
One in three (34%) low-paid workers have resorted to taking on extra work to make ends meet, with one focus group participant telling us that they worked 14-hour days and still couldn’t cover all their costs. Juggling multiple jobs and working longer impacted the amount of quality time that could be spent with friends and family, with 2 in 5 (43%) low paid workers saying it makes relationships with friends and family worse and 1 in 3 (33%) saying it makes their relationships with children worse.
A real Living Wage offers hope
There is a clear solution to improving low-paid workers’ lives: 65% said they believed being paid the real Living Wage would positively affect their overall quality of life.The findings come ahead of the Living Wage Foundation’s announcement of new Living Wage rates for 2025-2026 on 22nd October 2025.
Katherine Chapman, Executive Director of the Living Wage Foundation said: “…research shows the harsh reality for workers paid below the real Living Wage, forced to make impossible choices between heating homes, feeding their families or falling behind on bills. This highlights the importance of a wage based on the cost of living. The real Living Wage is a lifeline, enabling people to live with dignity, with enough to cover the basics and the ability to deal with life’s challenges.
It’s been encouraging to see yet more employers, from all sectors and sizes, joining the Living Wage movement of over 16,000 employers, despite tough economic times. They know that when staff are paid a wage that reflects the cost of living, they thrive, and so do the organisations they work for.
Giovanna, a cleaner who started being paid the real Living Wage a year ago: “For nine years I was working on the minimum wage, doing cleaning work for several cleaning companies. To make ends meet I had to share a room with people I didn’t know – not a house, a room. Coming home was like going to prison. I had to be silent so I didn’t disturb my roommates, and queue to use the toilet, the shower or the kitchen. This has become normal in London due to low pay and high housing costs. This makes us ill, and it was really bad for my mental health. I remember recovering from surgery with no sick pay and no space of my own. I didn’t get furloughed in the pandemic because they closed the site i was working on and I didn’t know my rights. Instead, I got a temporary job paying £200 a week with no holiday.”
Katie Hood, Lead Community Organiser at Colchester Foodbank: “The Life on Low Pay report reflects the harsh reality of life for low paid workers that we see every day at Colchester Foodbank. The detrimental impact of low pay affects all areas of our community’s welfare. The findings make it clear that the sobering reality of rising living costs, limited access to real Living Wage jobs and widening economic inequality are leaving too many people behind.
At Colchester Foodbank we believe that no one should be hungry. That ‘s why our mission is to end hunger and hardship in our community. We are proud to have been an accredited Real Living Wage Employer since 2022, taking a stand against hardship and poverty and leading by example in our community. Paying the real Living Wage means ensuring the people who are the lifeblood of organisations – the retail workers, the emergency workers, the waiters, the cleaners – can always meet their essential living costs. This report represents the voices that we at Colchester Foodbank seek to empower and hope that it is seen widely as a call to action in the face of growing economic uncertainty and disempowerment of those on low pay.”
Sam, Customer Account Executive at Thomas Kneale & Co, a Living Wage and Living Hours accredited textile manufacturer based in Manchester: “Life was awful when I worked on a low paid, zero-hours contract earlier in my career. I lived in some really unpleasant rental properties. I constantly had to choose between one bill or another. I was always cancelling appointments as I couldn’t afford the travel costs and even putting off Drs appointments until payday as prescriptions were too expensive! Safe to say all of this had a really poor effect on my health and overall outlook on life.
Now I’m paid a real Living Wage, these problems have all disappeared. I’m excited about my future. I’m settled in a comfortable home. I don’t have to worry about bills anymore as I pay them all by direct debit. And if I want to go out from time to time I can. I live my life on my own terms without the stress and anxiety of living with no money.”
Brett Mendell, Managing Director Thomas Kneale & Co: “At Thomas Kneale we believe our colleagues are the most important part of our business. That’s why we’ve been supporting them with a real Living Wage for the last ten years. Paying a fair wage means our colleagues are able to afford the bills but also go out at the weekend or pay an unexpected cost. That’s obviously a huge benefit to our people, but it brings benefits to the business too: higher productivity, fantastic customer satisfaction, lower absenteeism, better retention, and stronger morale. The real Living Wage is such a good investment that we’ve gone even further and now provide secure, guaranteed working hours our colleagues can rely on with Living Hours accreditation as well. It’s a no brainer for anyone looking to implement a sustainable, long-term business strategy that works for everyone.”
Living Wage v National Minimum Wage
Some may think that by paying the Living Wage they are removing the risk of breaching National Minimum Wage. However, the recent shaming list of 491 employers included some who are Living Wage employers.
So how is that possible as the Living wage is higher than the National Minimum (NMW) and the National Living Wage (NLW).
NMW regulations are not about a pay rate! There are rules that require identification of all working time whether paid or not, and an accumulation of qualifying earnings amounts that count as NMW earnings (and it’s not gross pay), and NMW can be impacted by deductions, salary sacrifice and other factors.
So yes, it is possible that a Living Wage employer can be in breach of NMW when investigated by the current NMW audit team at HM Revenue and Customs (HMRC). Soon duties will pass to the new Fair Work Agency (FWA).
PAYadvice.UK 19/10/2025