The Consumer Prices Index (CPI) inflation was measured at 6.7% in the year to August 2023, according to the Office for National Statistics (ONS).
This was down from 6.8% the previous month, and from October's peak of 11.1%.
Katherine Chapman, director of the Living Wage Foundation said: “After more than a year of record price rises, we are finally starting to see inflation ease. But today’s research shows that the cost of living crisis is far from over, especially for the 3.5 million workers who are paid less than the real living wage.”
The study found 39% of low-paid workers have regularly skipped meals and a third (32%) have been unable to heat their homes due to financial reasons.
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The study found half (50%) of low-paid workers are worse off than a year ago.
Sophie Fletcher, talent and people business partner at Malt, said employers should be aware of signs their employees are struggling financially.
She told HR magazine: “The most obvious sign is, of course, if an employee comes to you for help. It takes a lot of courage to mention financial concerns to your employer, so if an employee does, it probably means they have been struggling for a long time.
“Some less obvious warning signs can include taking more time off work, becoming disengaged, a drop in performance, not wanting to commute to the office, a sudden increase in sick leave, or someone suddenly withdrawing themselves from social aspects at work.”
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Over a quarter (27%) have fallen behind on their mortgage while 21% took out a payday loan to cover just their essentials.
Jenny Jones, HR solutions manager at AdviserPlus said employers can support financial wellbeing even if they are unable to raise wages.
Speaking to HR magazine, she said: “In 2023 and beyond, as employers, it's important to care for your employees' wellbeing since they rely on you for income. However, due to higher costs, not all businesses can give everyone a big raise to keep up with inflation.
“Organisations need to find creative ways to make employees feel valued and supported, for example offering one-off cost of living bonuses to employees can provide immediate financial relief without committing to permanent pay increases.”
Jones also suggested flexible working – which can ease travel and childcare costs – and financial education.
She said supporting employees’ financial wellbeing will have benefits for both businesses and workers, adding: “Supporting employees during a cost-of-living crisis can improve employee satisfaction and loyalty, reducing turnover rates.
“Financially stressed employees may be less productive and engaged at work. Supporting their financial well-being can boost morale and job performance.
“HR should approach this issue with empathy, confidentiality, and a willingness to provide support or connect employees with available resources to help them navigate their financial challenges.”
