Literacy – or the ability to read, write speak and listen in a way that lets us communicate effectively and make sense of the world – acts as the foundation on which more complex skills are built. It not only impacts a person’s ability to read and write, but one’s ability to communicate their ideas to others. That is key to a successful education, close relationships and performing well in the workplace.

We use the OECD Survey of Adult Skills study to identify people who are defined as having very poor literacy skills - those in our society who do not have the literacy skills to cope with everyday life. They may be able to understand short, straightforward texts on familiar topics but reading information from unfamiliar sources, or on unfamiliar topics, could cause problems.

Analysis suggests that, in 2011/2012, approximately 16.6% of working age adults (aged 16-65) in England and Northern Ireland had very poor literacy skills. This is equivalent to nearly 7 million working age adults in the UK. Of the 32 OECD countries surveyed, England ranks 16^th and Northern Ireland 18^th in literacy when analysing the percentage of adults with very poor literacy skills. Even though the UK ranks higher than the OECD average, there is still significant room for improvement. For example, only 5% of working adults in Japan have very poor literacy.

Figure 1. Percentage of adult population with very poor literacy skills

Source: OECD (2019): Skills matter: Additional results from the Survey of Adult Skills, Table A2.1. Very poor literacy is defined as Level 1 and below.

There are also significant differences in literacy levels within the UK as shown in Figure 2. 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. This may indicate that regional inequalities in basic skills are driving other inequalities we see play out across the country.

Figure 2. Significant variation in literacy levels across UK regions

Source: PBE analysis of OECD PIAAC data. Very poor literacy defined as Level 1 and below. Wales and Scotland are estimated to have the weighted England and Northern Ireland average (shown as UK).

The impacts of poor basic skills can permeate throughout multiple facets of an individual’s life, affecting social, health and economic experiences. Individuals with very poor literacy are found to have lower levels of trust in others and civic participation, as well as worse physical and mental health compared to those with higher levels of literacy.

Individuals with poor literacy are also more likely to be unemployed and earn lower wages. We estimate that the average worker in the UK with very poor literacy skills is earning approximately 7.1% less than they would if they had a basic level of literacy skills – the equivalent of nearly £1,500 less per year. This means that the average 18-year-old with very poor literacy skills will earn around £33,000 less over their lifetime than if they had a basic level of literacy. This is an economically significant amount: the average person with very poor literacy skills earns around £21,000 per year so they would need to work an additional 1.5 years over their lifetime to make up the lost income.

The UK is at a critical point. Currently there are approximately 1.6 million adults unemployed following the Covid crisis and potential for more to come as furlough ends. With lower paying sectors such as retail, hospitality and leisure badly hurt by lockdowns, workers in these fields face a hard road back to normality. The government has an opportunity as the economy recovers, to put the UK on a path to a more productive future by seeking to give people the basic skills they need to move into higher skill, higher wage opportunities rather than back into lower paid roles.

Ultimately, having high levels of basic skills can not only help individuals to progress into higher earning roles, but it can also insulate them from sector-specific downturns as seen during the pandemic. Having a more productive and agile workforce can help the country recover and shift with the changing economic landscape.

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