How can you budget on a zero-hours contract? | Debt Advice Foundation

How can you budget on a zero-hours contract?

New figures published by the Office of National Statistics (ONS) say that at least 1.4million workers in Great Britain are on contracts that don’t guarantee a minimum number of hours.  This number includes zero-hours contracts and some other forms which do not guarantee work.

New figures published by the Office of National Statistics (ONS) say that at least 1.4million workers in Great Britain are on contracts that don’t guarantee a minimum number of hours.  This number includes zero-hours contracts and some other forms which do not guarantee work.

The ONS also identified another 1.3 million work contracts where no work was undertaken.  There are a variety of reasons for these (including people working for more than one employer) but the ONS says that some at least should probably be added to the number of people on “non guaranteed hours contracts” (NGHCs).

Commenting on the new figures, David Rodger, Debt Advice Foundation chief executive, said: “It can be difficult enough for a family to establish a workable monthly budget when they have a steady income.  Understanding exactly how much income you have and how much your regular bills and other financial commitments cost is fundamental to managing money and avoiding debt.

“For people who are not being guaranteed regular hours of work, this task becomes nigh-on impossible.”

The ONS figures show that almost half of all businesses in the tourism, catering and food sectors use these contracts, with larger companies more likely to use them; over half of all companies with 250 or more staff make some use of NGHCs.   People working on these contracts are more likely to be under-25 or over-65. 

In some cases – such as students and those around retirement age – the workers want or need flexibility in their working life.  But for many, such as those working in the tourism, catering and food sectors where half of all companies use NGHCs, there is no other option.

David Rodger said: “While these contracts may be appropriate for some, they have mushroomed recently and will be making life very difficult for families who are already struggling with rising costs and low incomes. 

“Credit is being marketed to us constantly, but without a regular income stream it is impossible to gauge whether repayments are affordable after all the priority bills have been paid.”

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