The National Living Wage for people over 21 just got a big raise. This is a total increase of 6.7%, raising it from £11.44 to £12.21 an hour! Moreover, the minimum wage for younger workers aged 18 to 20 has increased significantly from £8.60 to £10 an hour. Apprentices’ minimum wage will increase to £7.55, from £6.40. These changes are intended to help out low-income wage earners, but hundreds of thousands of families are still living in extreme poverty.
No matter how much these companies raise wages, working single parents such as Laura Roan and John Paine are still getting pinched. Yet their financial pressures have only grown.
Necessity and imagination Roan lives with her two daughters, and works part-time at Asda, the local supermarket. To cover her costs, she sometimes uses emergency credit on her gas meter, and frequently uses her overdraft. She expressed her struggles succinctly, saying,
“Without my own mum helping, there would be some days when I would not have any electric.” – Laura Roan
Her experience typifies the struggle that many low-income families endure. For Roan, the recent upturn in wages has failed to take the pressure off financially, and she said,
“I got paid last Friday and it has all gone. I just live day to day.” – Laura Roan
John Paine, a single father of two, is in a bind. He’s parenting three autistic children ages five to eight. After all his bills, he just about breaks even with £100 left over. This paltry increase is a drop in the bucket compared to skyrocketing costs of living. As for how these financial pressures affected his home life, Paine shared it with such power, it’s worth sharing Paine’s words directly.
“It means we do not go out very much.” – John Paine
Recent studies show that families in the lowest income quintile pay nearly 41% of their income in taxes. This overwhelming share is spent on nonnegotiable bills such as water, electricity, internet, and automobile insurance, in addition to making rent and mortgage payments. Citizens Advice has already raised alarm over the huge debt pressure facing these households.
Dame Clare Moriarty of Citizens Advice said that these are “extraordinary times” for families and stronger support was urgently needed. She stated,
“After years of cost-of-living pressures, households across the country are about to feel the extra shock of rising essential bills.” – Dame Clare Moriarty
The recently announced cap on the annual energy bill for a typical household in England, Wales and Scotland is rising to £3,550. It will increase by £111 to reach £1,849 per year. This is the largest average increase for council tax bills in England (4.99%). This recent jump piles on the financial burdens that families like Roan’s and Paine’s are already feeling.
So, the new annual wage increases provide a giant step-up of relief. They often prove insufficient to cover skyrocketing expenses for basic, critical services. The new annual salary for employees receiving the National Living Wage currently totals up to £23,873.60 for a typical working week of 37.5 hours. This is an increase over the old amount of £22,368.06.
For 18 to 20-year-olds, the annual salary has finally come up to around £19,552. This is an improvement on £16,815 for comparable work week deliveries. Apprentices will benefit too with annual earnings increasing from £12,513 to £14,762.
As inflation continues to rise and essential costs soar, experts caution that millions of individuals on the lowest incomes may find themselves trapped in a cycle of financial instability. In the process, our households are being squeezed beyond the point of saving or investing in their own futures.
