The Child Poverty Action Group found that a single parent on the National Living Wage (NLW) is £74 a week short of the minimum income needed. A couple with two children would be £49 a week short of the income needed, the charity said.
These figures are a small improvement from last year when couples were £59 a week short. The NLW is £7.83 an hour for those aged over 25.
A government spokesperson responded that fewer families are living in absolute poverty: "The employment rate is at a near-record high and the National Living Wage has delivered the highest pay increase for the lowest paid in 20 years, worth £2,000 extra per year for a full-time worker."
However, the Child Poverty Action Group said that the small increases in wages had been offset by tax credits being frozen.
The charity’s definition of a 'no-frills' lifestyle is based on the Minimum Income Standard; a set of criteria drawn up by the Centre for Research in Social Policy at Loughborough University. It calculates the income required for a minimum standard of living based on essentials such as food, clothes and accommodation, as well as 'other costs required to take part in society'.
Jatin Patel, social mobility manager at KPMG UK, commented that the research highlights the need for employers to pay a real living wage.
“It’s an unfortunate reality that working people are still unable to earn enough to provide their family a basic lifestyle. The findings of this report reiterate the importance of paying the real living wage, which can help lift people out of working poverty and in turn improve social mobility,” he said.
Patel added that boosting pay improves employee morale and performance. “With the cost of living higher than it’s ever been we as employers can take active steps to address this by paying the real living wage. This also delivers tangible business benefits. In our own firm and supply chain it has improved staff morale, driven a rise in service standards, improved the retention of staff, and increased our productivity,” he said.
“It may not be possible or practical for everyone, but all organisations need to do what they can to address the problem of low pay. Of course change cannot happen instantly, but making an initial assessment is an important first step.”
Martin Todd, head of reward and policy at Grant Thornton UK LLP, said that providing a fair wage was part of being a responsible employer.
“As a firm we believe it is right to give people a wage that enables them to support themselves and their families. This is something that a responsible employer should do and we set our minimum levels of pay significantly in excess of the government’s suggested hourly rate," he said.
Employers should also consider workplace benefits, such as flexible working, Todd added.
"Pay is just one area to consider though and there are many things that employers can do to help support their employees. This includes offering benefits such as time off for family matters or wellness options that can support people through financial or wellbeing awareness.”
