· News

Nearly 5m workers earn below living wage, says study

There has been a sharp rise in the number of workers earning below the living wage, research has found.

About 4.8 million workers in the UK earn below the living wage, up from 3.8 million in 2009, the Resolution Foundation think tank has said.

Unlike the minimum wage, it is up to employers to decide whether their staff are paid the living wage, which is currently £7.45 an hour nationally and £8.55 in London.

The Low Pay Britain study found 77% of people aged under 20 earn less than the living wage, as do 25% of female workers, which is up from 15% in 2007.

The report's author Matthew Whittaker, who is a senior economist at the Resolution Foundation, said: "For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.

"This means an increasing struggle to keep up with the cost of living. Britain has a sorry story to tell on low pay. Only a handful of our close competitors do worse and the large majority have much lower rates of low pay - sometimes half as much.

Two-tier workforce

The study found a significant fall in low pay among older workers, those aged 60 and older. In 1995, about 35% of older workers were in low-paid jobs, which dropped to 24% on 2012.

In the same period the number of low-paid younger employees (aged between 16 and 30) has grown from 26% in 1995 to 37% in 2012.

The study found there is a growing emergence of a two-tier workforce in Britain, in which the lower tier is characterised by low-paid, low-skilled work, which is often temporary, part-time or self-employed.

A Government spokesman said: "We encourage employers to pay above the national minimum wage when they are profitable and when it's not at the expense of jobs, which is what the Low Pay Commission takes into consideration when it sets the national minimum wage.

"Despite being in tough times, this Government is doing absolutely everything it can to help people on low pay with the cost of living.

"That's why we're taking two million people out of tax altogether, cutting income tax for those on low incomes and freezing council tax."