Living wage research for KPMG: …

current trends in household finances and structural analysis of hourly wages

an economic research paper by Markit Economics published October 2012

Executive summary

KPMG Living Wage Household Finance Index survey

i) Key findings for October:

• Exactly 41% of people earning below the Living Wage reported worsening finances
• Six times as many saw savings fall (30%) as those that indicated a rise (5%
• Higher debt contrasted with a decline in debt among people above the Living Wage
• Squeeze on cash availability much greater for people earning below the Living Wage
• Actual spending rose at similar rates on both sides of the Living Wage threshold…
• …but people earning below the Living Wage reported a much steeper drop in their appetite for major purchases

ii) Compared to those earning the Living Wage or above, people earning below the Living Wage are especially downbeat about…

• Current household finances
• Savings
• Cash availability
• Workplace activity
• Appetite for major purchases
• Ease of access to unsecured credit

Data source: Markit 

Structure of hourly pay across UK jobs and regions*

iii) Key findings:

• An estimated one-in-five workers across the UK are earning below the Living Wage
• This amounts to some 4.82 million people
• The largest occupational category within this is sales & retail assistants, of which there are an estimated 780,000 people earning less than the Living Wage
• As a proportion of all workers, the highest prevalence of sub-Living Wage earners is among bar staff (an estimated 90% of workers in this category) and waiters & waitresses (85%), partly reflecting reliance on discretionary tips to top up earnings in these categories
• Elsewhere, the highest proportion of below Living Wage earners is in kitchen & catering assistants, elementary personal services occupations and launders, dry cleaners & pressers (all 75%)
• Below Living Wage estimates vary across regions, with Northern Ireland (24%) having the highest proportion of workers below the Living Wage
• London and the South East have the lowest proportion of those earning less than the Living Wage (both 16%)

*Data source:
Markit estimates based on ONS figures

Full text (PDF 31pp)

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