London's low-paid workers hit hardest in whole of UK

Wages for London workers have grown at the slowest rate in the UK, but their living costs rose at the fastest rate

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06:00, 15 MAY 2017

London's wage gains were the lowest, according to latest figures (Image: Indeed)

London's poorest workers face a 'grim' reality - as their wages have grown at the slowest rate in the UK, but their living costs rose at the fastest rate, a survey has shown.

New wage figures reveal that the capital's worst off have seen almost no benefit from the introduction of the National Living Wage, and are at the highest risk from surging inflation than anyone else in Britain.

The National Living Wage – which was introduced by then-chancellor George Osborne in April 2016 in an effort to boost the pay of Britain’s poorest workers – has had minimal effect on the standard of living for low-paid Londoners, according to a study by job-hunting website, Indeed.

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In the 12 months before the National Living Wage came into force, the latest year for which official data at the regional level is available, average salaries for the poorest 10% of Londoners rose by just 5.1% in nominal terms – the slowest rate in Britain.

Yet researchers found that at the same time, the cost of living in London rose faster than anywhere else.

Average rents in the capital rocketed by 3.7% – 10 times faster than in Wales and seven times faster than rents in Scotland.

Indeed say the research paints a 'grim' picture for London’s lowest earners, as they were already seeing the slowest real wage growth in Britain when the National Living Wage was introduced, and one year on, the new law will have made minimal impact on their paypackets.

Unsurprisingly, London rent costs soared the most (Image: Indeed)

Mariano Mamertino, EMEA economist at Indeed, said: “Low-paid Londoners are in a double bind.

"Their earnings are typically too high to have been increased by the introduction of the National Living Wage – yet their living costs are both the highest, and the fastest rising, in the country."

The introduction of the National Living Wage compelled few London employers to increase the salaries of their lowest-paid staff.

When the law came into force in April 2016, the poorest 10% of Londoners were already earning on average 5% more per hour than the £7.20 minimum initially stipulated by the National Living Wage.

Mr Mamertino said: “The National Living Wage is a national minimum.

"This means it disproportionately benefits regions where wages and living costs are lower, and does little to help Londoners whose earnings and rental costs are higher.

“London’s poorest workers already had the slowest rate of real wage growth in Britain when the National Living Wage was introduced.

"With few Londoners seeing any benefit from the introduction of the new minimum pay level, many will be sitting ducks as rising inflation erodes their real earnings still further.”

Real wages for low paid-Londoners was found to only rise by 3.9% during the year – far behind the second worst performing area, Scotland.

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