Nearly 3m employees ‘have unstable pay’

Millions of working people in Britain have unstable pay, a new report has warned.

According to the Resolution Foundation and Joseph Rowntree Foundation, one in seven UK employees - nearly 3m people - experience erratic earnings.

This means that for four or more months of the year, their earnings are at least 25% above or below their average wage.

Young people are the most likely group to be in this position, with one in four 20 to 24-year-olds not having stable pay.

The report has warned that this is putting many low-paid workers under financial pressure and making them more reliant on credit.

Who is most likely to get unstable pay?

The report found that more than one in four (27%) people working in hospitality are on unstable pay.

That’s followed by:

• arts and recreation - 23%
• retail - 16%
• health and social care - 14%

The Resolution Foundation said it’s “no coincidence” that zero hours contracts are particularly common in these sectors.

As a result, it believes more needs to be done to improve living standards for people working in these areas, such as:

• making universal credit more compatible with erratic pay
• making low-income workers more financially resilient
• encouraging employers to smooth out unstable pay for their employees

“High levels of erratic pay among young and low-paid workers is concerning, as they have fewer resources to fall back on when earnings dip,” said Nye Cominetti, principal economist at the Resolution Foundation.

“They are also in a weaker position to bargain for stability - underpinning the importance of the government taking action to improve stability for those workers through its employment rights bill.”

Among the steps the government is taking are:

• banning zero hours contracts
• ending fire and rehire tactics
• making sure the minimum wage accounts for the cost of living
• making statutory sick pay a legal right for all workers
• increasing the penalty companies face for not properly consulting employees during mass redundancies