One in five (19%) UK adults are in the gig economy and could be facing financial disaster, the Income Protection Task Force (IPTF) has warned.
A survey from the IPTF found a quarter (26%) of Brits live pay-check to pay-check, don’t make ends meet or are in severe financial difficulty, but this rises to almost a third (31%) for those working in the gig economy.
Half of gig economy workers admitted to taking desperate measures to survive between pay days – compared to just 9% of those not working in the gig economy.
|GIG ECONOMY WORKERS: MAKING ENDS MEET|
|Taken out a payday loan||21%|
|Used a food bank||14%|
|Used alcohol as a coping mechanism||8%|
|Source: Income Protection Task Force|
Over a fifth of gig economy workers (21%) have taken out a payday loan to make ends meet, 14% have gambled to try and win more money and 14% have needed to use a food bank.
Alcohol has been used as a coping mechanism for 13% of gig economy workers, and 8% have admitted to shop lifting.
Over a quarter (26%) said they have had to borrow money from family or friends between pay days.
The IPTF also found temporary or contract workers are much more likely to be off work long term with physical or mental ill-health – 44% have been unable to work for longer than three months compared to 25% of those who do not work in the gig economy.
On top of this, 39% said they would be unable to cope financially for more than three months if they couldn’t work and a further 21% could not cope for more than six months.
Physical ill-health is the biggest reason temporary or contract workers have been off work long term (38%) whereas one in five (19%) have been unable to work because of mental health issues. A further 14% couldn’t work because of a disability.
Because of their inability to work, four fifths (79%) of gig economy workers who have been long-term sick have suffered mental health issues.
Evan Odell, researcher at Disability Rights UK, said the rise of the gig economy has stripped away predictability of hours and earnings and with that financial security and peace-of-mind.
“The promised flexibility of the gig economy has benefited employers, but not employees,” he argued.
Roy McLoughlin, co-chair of the IPTF, because of the more temporary employment status of gig economy workers, their finances are likely to be hit much harder when they face ill-health and it can also have a huge impact on partners and other family members financially and emotionally.
“There are many ways that people whose work pattern doesn’t fit the standard mould can insure themselves against the financial impact of long-term ill health, that would continue to pay them an income when they can’t work – and it often costs a lot less than people think,” he added. “We would urge people to seek advice from an independent life and health insurance specialist to find out the best options for protecting their income.”