Wednesday, December 3, 2014

Zero-hours contracts are a disincentive to work

Unemployed people in the UK have more monthly disposable income than part-time and zero-hour workers according to a new report out today.

Scottish Friendly’s ‘Disposable Income Index’, which tracks the amount of money people have left over each month after bills and essentials have been paid for, has revealed that while, on average, the country’s unemployed have just 9.3 per cent of their income left over each month, this is compared to only 7.9 per cent for part-time workers and 7.8 per cent for zero hour workers.

Indeed, according to the report, the nation’s unemployed have on average £174 left over as spending money each month, compared to just £130 for those who work zero-hour roles.

Across the UK, disposable incomes have risen by 2.3 per cent in the last three months, though the pattern is uneven and for many on low incomes the situation is grim.

The survey shows people now have an average of 10.5 per cent of their salary left over each month after bills and essentials have been paid for, up from 5 per cent at the start of the year. This equates to an average disposable income of £278.

However, the income gap between the best and least well off continues to rise, making averages deceptive on their own, analysts point out.

Calum Bennie, spokesperson for Scottish Friendly, commented: "While the country as a whole has higher disposable income than they did a year ago, there is a broader concern that those who work part-time or that have zero-hour roles are likely to have less cash in their back pocket than someone who is unemployed.

"The findings should serve as a stark warning of the problems facing so many workers in the UK. It’s bad enough that people don’t know what is going to be in their wage packet at the end of the month, but the index shows that for certain workers, there now appears to almost be a disincentive to work."