More than 1 million public sector workers in Britain are paid less than the amount required to make ends meet, trapping them in in-work poverty, according to a report.

The Living Wage Foundation said as many as 1.2 million people working for the NHS, councils and other public sector employers receive unsustainably low wages of less than £9 an hour, or £10.55 in London.

It said public sector workers, employed either directly by the state or on outsourced contracts, account for up to 20% of the 6 million people in Britain paid less than this level – the real living wage – which is a voluntary minimum set each year to reflect living costs.

The real living wage is higher than the government’s legally enforceable “national living wage” of £7.83 an hour across the country, which is to rise to £8.21 from April.

Using data compiled by the Smith Institute, the report revealed the vast majority of public sector workers earning below the real living wage are in local authority jobs, including teaching assistants, cleaners, care workers and catering staff. Almost half a million are on outsourced contracts, while 725,000 work directly for a public sector body.

Lola McEvoy, the head of campaigns at the Living Wage Foundation, said: “It’s simply wrong [that workers are] struggling to keep their heads above water on wages that don’t meet basic living costs.”

The analysis comes after years of public sector pay freezes imposed by the Conservatives. Although Theresa May has since scrapped the policy, the prime minister is still under pressure to show austerity is at an end after nearly a decade of cuts.

Christina McAnea, the assistant general secretary of Unison, said: “Hundreds of thousands of workers delivering essential public services are on poverty pay. Many have second and even third jobs just to keep the wolf from the door.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “Every employee deserves a fair and competitive wage that recognises their hard work and contribution to our economy.

“The government has demonstrated its commitment to workers’ rights through the biggest package of workplace reforms for over 20 years, and has helped to deliver the fastest wage growth in 20 years for the lowest-paid workers through the national living wage.”