Workers paid the legal minimum rate are more than £1,500 a year worse off than employees on the “real” Living Wage, campaigners reveal today.
The Government’s National Living Wage rose from £7.83 to £8.21 for workers 25 and over at midnight.
But it still lags behind the £9 hourly level analysts say is needed for a decent life, climbing to £10.55 in London where housing and transport costs are higher.
It means an annual gap of £1,540.50.
Living Wage Foundation director Katherine Chapman said: “Today’s increase in the Government minimum wage will provide a welcome boost to low-pay workers.
“But around six million workers still earn less than the real Living Wage and struggle to keep their heads above water.
“Many are unable to afford even the basics like decent family meals, or a warm and safe home.
“Over 5,000 responsible employers have gone beyond the Government minimum and committed to pay a real Living Wage.
“We now need to see more businesses step up a provide a wage that truly covers the cost of living.”
Researchers calculated that a “real” Living Wage worker doing 37.5 hours a week for 52 weeks would receive £17,550 a year.
But a full-time employee aged 25 or over on the Government’s National Living Wage - in reality the legal minimum - would get £16,009.50.
The LWF said the pay gap would fund almost six months’ food and drink bills for an average household, worth £1,575.60; a year’s average gas and electricity bills at £1,322; or more than two months’ average rent at £1,422.
Analysts said it would take 25 additional working days to make up the shortfall - the equivalent of working an extra five weeks every year.
The gap between the Government minimum and the real Living Wage is widest for young people aged 18-20.
They would earn just £11,992.50 a year - some £5,557.50 a year less than a full-time worker of the same age earning a real Living Wage.
They would need to work 90 extra days, or over 18 weeks longer, to earn a real Living Wage.
Helen Frith, a cleaner at Radiant Cleaners, a Living Wage employer in Nottingham, said: “The difference between the National Living Wage and the real Living Wage, for me, boils down to dignity.
“It’s the difference between having to choose whether to have heating or food, to being able to have both.
“It’s the difference between making excuses as to why you can’t socialise with friends to being able to say yes to going out for a meal or coffee.
“It’s being able to buy the things you need, it’s being a member of society, it’s being human.”
