Many employees are finding it hard to cover their monthly expenses because of soaring living costs, a new study has found.
According to the Work Foundation at Lancaster University, one in six employees struggle to cover their bills each month.
Meanwhile, two in five say they have nothing left to save or spend on non-essential items such as holidays.
The research also highlighted the growing financial pressures facing workers on lower incomes.
Just 42% of people earning under £25,000 a year believe their pay has kept up with the cost of living.
By contrast, 73% of those earning over £60,000 say their earnings have kept pace with rising costs.
Ben Harrison, director of the Work Foundation, said: “Many workers continue to struggle with day-to-day costs and have fears for their financial future.
“Raising living standards is not just about figures on a spreadsheet - it’s about workers feeling more financially secure.”
Government aiming to boost pay and job security
The government has introduced measures designed to improving pay and job security for people on low incomes.
In April, the national living wage for those aged 21 and over rose to £12.21 an hour - up from £11.44 an hour.
Meanwhile, the national minimum wage for 18 to 20-year-olds increased from £8.60 an hour to £10 an hour.
In addition, proposed legislation aims to:
- ban zero-hours contracts
- end fire-and-rehire practices
- ensure the minimum wage accounts for the cost of living
- make statutory sick pay a legal right for all workers
- increase penalties for companies failing to properly consult employees during mass redundancies
However, the Work Foundation has warned that many of these reforms are still years away from full implementation.
“There is a real risk that change comes too late for those struggling today,” Mr Harrison added.
Written by James Glynn
Senior Financial Content Writer
