4.82 million workers are forced to survive on less than the living wage, according to a study commissioned by KPMG.

Those working in hospitality were hit hardest, with 90 per cent of bar staff and 85 per cent of waiters not paid to living wage level, currently at £8.30 an hour in London and £7.20 for the rest of the UK.

At 24 per cent, Northern Ireland had the highest proportion of workers earning under £8.30, closely followed by Wales at 23 per cent. The South East and London had the lowest levels, with 16 per cent of workers earn short of living wage.

The living wage is used as the benchmark rate to show what a worker would need to afford basic living standards. Contrary to minimum wage, which is set at £6.19 for those aged 21 and over, the living wage is voluntary, meaning that employers are not legally obliged to pay it.

“This really lays bare the extent of the problem of low pay in Britain”, said Marianne Fallon, head of corporate affairs at KPMG.

“Times are difficult for many people, but of course those on the lowest pay are suffering the most”, she added.

Four out of ten low paid workers surveyed for the report felt that they are worse off now than one month ago, with nearly half (47 per cent) expecting to be in a worse financial condition this time next year.

Campaigners have complained that employers are failing to do enough to help those most vulnerable to a merciless double-dip recession.

“It is shocking that in this day and age, one in five workers is still earning less than is needed to maintain a decent standard of living”, declared Frances O’Grady, incoming secretary of the Trades Union Congress (TUC).

“Many more employers could afford to adopt the living wage, and we hope that many more decide to pay it in the comings months. Now more than ever is the time for employers to put an an end to poverty pay”, she added.