Money Wellness

cost of living

Published 14 Jul 2025

2 min read

Low-income workers say pay hasn’t kept up with cost of living

Rising living costs are putting more and more employees under pressure.

Low-income workers say pay hasn’t kept up with cost of living
James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 14 July 2025

According to research by the Work Foundation at Lancaster University:

  • one in six employees struggle to pay their bills each month
  • two in fifth don’t enough left over to put into savings or pay for holidays

Those on the lowest incomes in particular are feeling the squeeze right now.

Figures showed that just 42% of people earning less than £25,000 a year say their pay has kept up with the cost of living.

That compares with 73% of those earning over £60,000 a year.

“Many workers continue to struggle with day-to-day costs and have fears for their financial future,” said Ben Harrison, director of the Work Foundation.

“Raising living standards is not just about figures on a spreadsheet.

“It’s about workers feeling more financially secure.”

Government reforms may ‘come too late for people struggling right now’

Mr Harrison pointed out that the government has prioritised increasing wages for people on low incomes and improving workers’ rights.

In fact, new national living wage and national minimum wage rates were introduced in April, and the government is introducing a law that will:

  • ban zero hours contracts
  • end fire and rehire tactics
  • make sure the minimum wage accounts for the cost of living
  • make statutory sick pay a legal right for all workers
  • increase the penalty companies face for not properly consulting employees during mass redundancies

However, Mr Harrison said many of these reforms are still “years from implementation”.

As a result, he believes there is “a real risk that change comes too late for those struggling today”.

James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

James has spent almost 20 years writing news articles, guides and features, with a strong focus on the legal and financial services sectors.

Published: 14 July 2025

The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.

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James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 14 July 2025

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