A major new study has found that one in six UK workers is now regularly struggling to pay their essential bills, highlighting the ongoing toll of the cost of living crisis despite a recent fall in inflation and modest wage growth.
According to research by the Work Foundation at Lancaster University, 17% of employees say they consistently face difficulty meeting monthly expenses. A further 40% reported having little or no disposable income left after paying for essentials, leaving them unable to save or cover emergencies.
The findings come as new data from the Office for National Statistics shows that more than a quarter (26%) of UK adults cannot afford an unexpected but necessary expense of £850 — the highest level since September 2024.
Ben Harrison, director of the Work Foundation, said the figures reveal a “deep-rooted” crisis in living standards that wage growth alone has not yet resolved. “Raising living standards is not just about figures on a spreadsheet — it’s about workers feeling financially secure,” he said. “Four years into the worst cost of living crisis in a generation, our analysis shows the long shadow of two decades of pay stagnation.”
The financial pressure has also led to a sharp rise in the number of people holding down more than one job. Official statistics show that 1.23 million workers are now in multiple roles — the highest figure on record and a 10% year-on-year increase.
“Second jobs are often framed as optional ‘side hustles’, but for many, they’re driven by economic necessity,” Harrison said. “Even after recent pay increases, many people still don’t earn enough from their primary jobs to meet basic needs.”
Young workers are among the hardest hit. Half of 16- to 24-year-olds surveyed said they feared job loss in the next year, a concern compounded by rising unemployment, which has now reached 4.6% — the highest level since 2020.
Older workers, meanwhile, remain sceptical about their financial prospects. Just a quarter of those aged 55 to 64 expect to receive a pay rise above inflation this year, reflecting broader concerns over job security and weak consumer confidence.
While markets anticipate a possible interest rate cut from the Bank of England as early as August, central bank officials have indicated they will wait for clearer signs that wage growth is cooling before easing borrowing costs.
The report concludes that headline economic indicators such as GDP growth and inflation fail to capture the lived realities of many working people. “We need long-term solutions that improve financial security and quality of life — not just temporary fixes,” said Harrison.
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