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We launch new research with Pro Bono Economics that shows poor literacy skills cost workers up to £1,500 a year in lost earnings

15 Sep 2021

image related to PBE report.jpg

Today, we launch new research in partnership with Pro Bono Economics that shows the average 18-year-old with “very poor” literacy skills will earn around £33,000 less during their working life than a person with a basic level of literacy.

That is equivalent to an extra 18 months’ employment, as the average worker with very poor literacy earns around £21,000-a-year - roughly £1,500 less per year than they would if they had a basic level of literacy.

PBE estimates that seven million people (16.6% of working age adults aged 16-65), in the UK have “very poor” literacy skills, meaning they have only limited vocabulary and cannot read lengthy texts on unfamiliar topics.

Approximately four million workers  (13%) in the UK are estimated to have very poor literacy skills and according to the study if this large percentage of the working population improved their literacy to a basic level, they could collectively benefit from an estimated annual pay rise of up to £6bn each year.

Individuals with poor literacy are more likely to be unemployed, earn lower wages and operate less productively than necessary.

PBE’s analysis shows that very poor literacy rates are twice as high for people not in the labour force (26%) compared to those working (13%) in Northern Ireland. In England,  very poor literacy rates are ten percentage points higher for those not in the labour force (23%) compared to those working (13%).

Literacy plays an essential role in all aspects of life and so it's unacceptable that the average worker in the UK with very poor literacy skills earns around £1,500 less per year than they would if they had a basic level of literacy. It is also unacceptable that seven million people of working age have very poor literacy skills. The fact that this figure includes four million adults who could get a collective pay rise of up to £6billion if they improved their literacy skills, sends an important message to the government ahead of its spending review.

Jonathan Douglas CBE, Chief Executive of the National Literacy Trust

The PBE study is based on the latest OECD Survey of Adult Skills which shows that the UK ranks better for levels of very poor adult literacy skills than the average for the 32 OECD countries surveyed. However, it still ranks far behind the likes of Japan where only 5% of working adults have very poor literacy skills.

This skills crisis is a huge problem, but it is one we can solve with the right ambition and collaboration across all parts of society. The government – at both the national and local level – can provide the cash and the leadership. Charities like the National Literacy Trust can provide the expertise. And companies can inspire change by investing in skills training for their employees. Working together we might secure a £6 billion pay rise for the country, alongside a range of other personal and societal benefits that would go some way to fulfilling the government’s ambitions for levelling up the country.

Matt Whittaker, CEO of Pro Bono Economics

The study also found significant differences in literacy levels within the UK. The North East  (23%)  and West Midlands  (22%)  have the highest percentage of working age adults with very poor literacy, while the South East  (11%)  and East  (12%)  have the lowest percentage.

These are the same regions which have the highest and lowest percentages of adults with low numeracy skills respectively, suggesting that an adult skills shortage is a major driver of regional inequalities seen across the country.

For more information about our Vision for Business Literacy Pledge, a commitment to support literacy in the workplace and community, please visit this page.

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