Minimum wage in the UK is currently £6.31 per hour for workers aged over 21, £5.03 for 18 – 20 year olds, £3.72 for under 18’s and £2.68 for apprentices under 19. Each October, the minimum wage rises by the odd few pence, but this year it’s going up to £6.50, a whole 19 pence more. This should make a lot of difference for those who are struggling on the minimum wage.
For someone who works a 35 hour week, it means an extra £352.45 of pre-tax salary per year. This equals a rise of £19 per month extra straight into their pockets. An extra £19 per month may not sound like much, but it could mean the difference between really struggling to put food on the table and being able to easily feed the family. Although this wage rise will be welcomed by many on the lowest wages, it’s still not even close to the ‘living wage’, which currently sits at £7.65 per hour outside of London, and £8.80 within London. This is the minimum amount that should cover the basic living costs in the UK, according to a yearly independent review.
If you are currently earning the minimum wage, you may have your own opinions about how easy it is to live on. Depending on where you are in the country, the minimum wage could leave you with just enough to get by comfortably, or it could mean you have a shortfall each month so you need to borrow in order to fill in the gaps. Fluctuating accommodation costs throughout the UK make up a huge part of this, as you can rent a two bedroomed house in Selby, North Yorkshire for around £510 per month, but the same house in Alton, Hampshire could set you back £860 per month.
As a rule, properties in the North are much cheaper than those in the South of the UK. Earning the minimum wage in London may not actually earn you enough to even live there; such is the state of the housing market at the moment. It takes two full time minimum wage incomes at least in order to live comfortably in many areas in the UK.
The breakdown of people who earn the minimum wage is surprising. You would think that many young people are the ones who earn the minimum hourly rate, but in fact, 10% of people aged between 35 and 54 earn this amount. A quarter of these older minimum wage earners have been on the minimum wage for five years or more. Unfortunately, many companies will offer the minimum wage for lower-skilled jobs because they can.
They know that people are desperate to work and they know that by offering the minimum wage, they’ll be within the law, but they’ll also be paying some of the hardest workers in the country very little for their time. Due to this, almost half of those earning a minimum wage have debts which continue to grow, and around 70% of them find it impossible to live off their wage packet alone.
This article has been written on behalf of Unsecured Loan News. Check them out if you’re looking for top personal finance articles.