Low Pay Increasing In Worst Hit Areas Despite National Falls
New analysis of ONS Annual Survey of Hours and Earnings (ASHE) data by the Living Wage Foundation reveals that areas where low pay is most prevalent are seeing things get worse, despite slow improvements at the national level.
The research further revealed that one in two hospitality jobs in the UK are paid below the Real Living Wage of £13.45 per hour.
72% of the 25 local authorities with the highest rates of below real Living Wage pay in the UK saw increases in low paid work between 2024 and 2025, compared to rises in only 33% of all local areas.
Rising low pay in most of the worst affected areas also contrasts with the national picture, where the rate of low pay across the UK overall fell from 15.7%, or 4.6 million jobs, to 14.6 %, or 4.4 million jobs.
The findings highlight a widening gap between the areas worst hit by in-work poverty and the rest of the UK, indicating that progress in tackling low pay is unevenly distributed.
The local authorities with the highest rates of low pay are clustered in certain regions: 11 are in London, five in the West Midlands, and four in the East of England.
The three local authorities with the highest rates of low pay are all in London: Redbridge (34.5%), Barking and Dagenham (31.2%) and Haringey (29.7%).
The three local authorities with the biggest annual increases in rates of low pay were all part of the 25 that already had the highest levels of in-work poverty: Merthyr Tydfil in Wales (13.3 percentage points), Merton in London (9.9 percentage points) and Lichfield in the West Midlands (7.7 percentage points).
In total, 326,000 workers are paid below the real Living Wage in the 25 local authorities with the highest rates of low pay, or nearly 7.5 % of the total number of low paid workers in the UK. That is despite only 4 per cent of all jobs being located in these areas, meaning they have nearly twice their share of low-paid jobs.
New research by Cardiff Business School and the Living Wage Foundation also released today found that if just half of the UK’s 4.4 million low paid workers saw their pay rise to the real Living Wage, the increase in wages, productivity and spending would deliver £1.6 billion back into the UK economy.
The real Living Wage is the only UK wage rate independently calculated based on the cost of living and is currently £13.45 across the UK and £14.80 in London to reflect higher living costs in the Capital. It is different to the government’s legal minimum (National Living Wage) of £12.21.
Workers paid below than the real Living Wage are unable to afford a decent standard of living, with many forced to skip meals regularly, use foodbanks and leave the heating off in winter.
Despite millions of workers on low pay, there is a growing movement of over 16,000 accredited Living Wage Employers in the UK who deliver pay rises in line with the cost of living to nearly half a million employees on the real Living Wage each year.
Together they have put £4.7bn back into the pockets of low paid workers since the campaign began 25 years ago.
Katherine Chapman, Director of Living Wage Foundation, said:
“Today’s findings show that despite low pay falling across the country, the areas already worst affected by in-work poverty are slipping even further behind. Hundreds of thousands of workers in these areas, as well as millions more across the UK, are still struggling to live with dignity as their pay is too low to cover basic living costs.
“The real Living Wage is the solution. After years of high prices, it’s more important than ever that more employers join the 16,000 committed to doing the right thing by paying their workers in line with the cost of living. It’s good for workers, businesses and the economy.”