About Low Pay

About Low Pay

Since the introduction of the National Minimum Wage in the UK, it has been illegal for employers to pay employees less than an hourly rate set by central government.

The present NMW rates are:

  • ADULT RATE: £6.08 per hour
  • DEVELOPMENT RATE (ADULTS 18-20): £4.98 per hour
  • 16-17 YEAR OLDS RATE: £3.68 per hour
  • APPRENTICE RATE: £2.60 per hour

HOWEVER it is broadly accepted by all credible anti-poverty agencies and relevant senior academics that NMW rate levels are insufficient to keep individuals and families out of poverty and in an acceptable standard of living. Therefore in London, for example, the London Living Wage rate is set by the Greater London Authority.

  • PRESENT London Living Wage Rate: £8.30 per hour1

Outside of London the Living Wage rate is set by the Centre for Research in Social Policy

  • PRESENT Outside London UK Living Wage rate: £7.20 per hour2

The 2011 Minimum Income Standard report conducted by the Centre for Policy at Loughborough University, concluded that in order to achieve the minimum acceptable standard of living, a single, working age employee would need to earn £7.67 per hour, an employee in a couple with 2 children £9.41 per hour, and a lone parent employee with one child £9.33 per hour.3

In 2010, an estimated 3.5 million employees aged 22 to retirement were paid less than £7 per hour. Incredibly, two-thirds were women and one-third were men; so one in five female employees - and one in ten male employees - were paid less than £7 per hour in the UK.4

The issue of in-work poverty is getting worse and worse, as wages are frozen, under-payment of the NMW increases and the cost of living rises sharply.

61% of children living in poverty live in working households, compared to 50% in 2005/06. 1.7 million children poor children live in working households compared to 1.1 million in workless households; shocking facts.5

Notes

1 http://www.london.gov.uk/mayor/economic_unit/workstreams/living-wage.jsp
2 http://www.crsp.ac.uk/MIS/downloads/livingwage/The-Living-Wage-in-the-United-Kingdom-May-2011.pdf
3 http://www.minimumincomestandard.org/downloads/2011_launch/MIS_findings_2011.pdf
4 http://www.poverty.org.uk/51/index.shtml
5 http://www.ippr.org/images/media/files/publication/2011/05/inwork%20poverty%20sep2010_1796.pdf