Low-income earners to receive pay rise as firms commit to living wage

2nd Nov 2014 14:31

UPDATE: On Monday KPMG released a structural analysis of hourly wages and current trends in household finances. Thousands of low-paid British workers are set to receive a pay rise after 1,000 companies pledged to boycott the minimum wage and pay at least the living wage.Citizens UK created the Living Wage Foundation to advocate higher pay for Britain's poorest workers.According to the organisation, the current living wage for a person living in the UK is £7.65 and £8.80 in London. The national minimum wage is £6.50 as of 1 October 2014.An announcement to confirm the pay rise, which will have impact on an estimated 35,000 workers, is expected on Monday.Citizen UK aims "to reach 5,000 accredited Living Wage employers by 2020" and has asked the government to reduce "income tax and national insurance contributions for the low paid".Rhys Moore, the director of the Living Wage Foundation, told the BBC that tax-payers suffer when firms pay their employees less than the living wage."Low pay costs the taxpayer money - firms that pay the minimum wage are seeing their workers' pay topped up through the benefits system."He added that 18 FTSE 100 firms have now signed-up, including Nestle, Barclays and ITV.Non-partisan think tank the Resolution Foundation revealed in a recent report that one-fifth of workers are now low-paid in the UK. This equates to five million people, 250,000 more than last year. KPMG's data revealed that London has the lowest proportion of people earning below the living wage, just 17%, while Northern Ireland has the highest at 27%.It was also estimated that 2.98 million part-time employees earn less than the Living Wage compared to 2.29 million full-time workers.