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Seven in 10 UK workers are ‘chronically broke’

New research has revealed the extent of the British public’s debt problems, with at least 70% of the UK’s working population ‘chronically broke’.

The study of more than 2,000 workers conducted by thinktank Royal Society of Arts and Populus found that 40% of those surveyed were permanently precarious and another 30% said they weren’t managing to get by.

Only 30% of those surveyed said they were living comfortably.

Brhmie Balaram, the author of the report and a senior researcher at the RSA, said: “Economic insecurity now stretches right throughout our labour market, including within jobs that appear safe on the surface.

“From retail workers to warehouse operatives, and from care workers to cleaners, we are beginning to uncover the hidden millions who are chronically broke year in, year out. The real danger for this group of workers is a childcare bill unpaid and yet another rent rise around the corner.”

According to the report, 32% of the UK’s workers have less than £500 in savings and 41% have less than £1,000.

Almost 30% are concerned about their level of debt while 43% of workers do not have anyone in their household they could depend on to support them financially in the event of hardship.

Fewer than half of employees (44%) feel they have progressed in their careers over the last five years; only 40% feel they have good opportunities to progress in future.

There are now nearly 1 million people in the UK on zero-hour contracts and 1.7 million in temporary work, with a record 4.8 million self-employed.

The RSA report also identifies what it calls Britain’s ‘new class structure’, with an online tool that lets people explore which ‘class’ they fall into.

The chronically precarious: People in this group are typically on a steady contract albeit with low pay. 60% have less than £1,000 saved and they have low job satisfaction and little autonomy at work.

Typical job: full-time sales assistant.

The acutely precarious: Work is often low-paid but, unlike the chronically precarious, pay is up-and-down. This is a young group and 45% have a degree.

Typical job: zero-hours hospitality.

The flexi-workers: 83% love their job but 59% earn less than £21,000 a year. They have high levels of savings and many are on a ‘second career’. They value autonomy above security.

Typical job: freelance photographer.

The steady-staters: 90% feel well treated and 69% well paid, even if work is a means to an end. But they have low savings, and rely on work for income so are vulnerable to a shock. Their routine jobs are at high risk of automation.

Typical job: public sector administrator.

The idealists: Mid-earning, passionate and often millennials (50% under 35), 70% think they make a positive contribution to society at work. They are most likely to rely on others, such as parents, for income. They are urbane and 25% have more than £10,000 saved.

Typical job: charity employee.

The strivers: Have regular jobs with high income and high savings, but worry the link between hard work and fair pay has broken. 73% are stressed but only 20% think their pay reflects their efforts.

Typical job: middle manager.

The high-flyers: The wealthiest group with 55% having more than £10,000 in savings. They are successful at adapting to automation, and the most likely group to value new technology. They report high job security, high autonomy and high fulfilment.

Typical job: director of an IT services business.

If you are struggling with debt, Money Advisor may be able to help. Find out how we can help you reduce your repayments and advise on a range of financial repayment options. Contact us today for expert, confidential advice with no obligation.

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