The concerning trend of precarious work is increasingly the focus of policymakers and researchers. Here, Kristian Fuzi and Professor Debora Price advocate for greater attention to the multiplicity of sectors and the widening age range of the workforce now affected by these working conditions.  Precarious work trends have serious consequences for the financial security of workers in the present and their financial security in later life.  

• Insecure work is not a new social issue, with many cases of ‘casual labour’ existing in places such as the Liverpool Dockyards until the late 1960s.  
• Precarious and insecure work constitutes the fastest growing section of the UK labour market, with 4.4 million people working on gig economy platforms each week and a total of 6.1 million workers found to be working insecurely, amounting to 19 per cent of the workforce. 
• These workers are known to have lower than average levels of income and pension savings and generally experience low pay, financial inconsistencies, high levels of part-time working and self-employment. They often lack access to workplace schemes, and generally earn insufficient amounts to save adequately or financially plan for later life. 

Many precarious workers are not in a financial position to save.  Our research has shown that where precarious workers can save, they are prioritising those savings for short-term financial resilience above later life security, raising significant future concerns for our social security system and the projection of an ageing precarious workforce. 

Researching Precarious Lives and Financial Behaviour 

For 12 months between June 2021 and 2022, we conducted research with 24 precarious workers from across the UK.  Each worker was asked to keep a financial diary and take part in two interviews.  The workers were aged 28-52 years old, included men and women, and at the first interview were facing insecure conditions as freelance, self-employed, fixed-term, part-time, or zero-hour workers.  The project was designed to understand the everyday financial lives of participants by investigating the impact of insecure working practices, social support, household inequality, and gender inequality on their engagement with later life financial planning. 

A key issue that emerged across the research sample was the financial constraints that insecure working conditions placed on participants.  Fixed-term workers lived with the monthly or annual uncertainty of ending contracts.  Those working part-time received an income that frequently only covered their households’ basic financial needs.  Freelance, self-employed, and zero-hours workers lived with the weekly uncertainty of income fluctuations.  The workers in this study frequently displayed a strong work ethic, expressed passion for their work and a sense of personal fulfilment from their working lives.  It was not the notion of work that defined their precarious position, but rather the uncertainties in income associated with it. 

Uncertainty and insecurity – housing and saving 

A further issue of precarity beyond work for many of the participants was the uncertainty, risk, and costs associated with housing.  Workers who were renting expressed a sense of power imbalance with landlords where rent could be raised at an unknown point, with little leverage to improve their housing conditions. Those workers attempting to escape the uncertainties and high costs of the rental market described how income inconsistencies made mortgage applications problematic.  Moreover, in cases where workers were existing homeowners, the insecurity and risk of income inconsistency remained a persistent problem with fixed-term mortgage agreements.  Whether renters or homeowners, financial inconsistency coupled with deregulated markets laid significant levels of risk and uncertainty on these workers.  

These everyday experiences of insecurity felt across their work and private life came to shape and limit their financial choices.  By providing a contextual understanding of these workers’ everyday lives, it was possible to understand why a precarious worker may or may not be saving for later life. Where workers were not engaging in saving behaviour, their everyday insecurity maintained a focus on their present issues of financially getting by or surviving.  

Workers engaging in saving behaviour were revealed to have less contextual insecurity, enabling a focus beyond the immediate – but still, largely, short-term.  This resulted in them prioritising greater financial security in their present conditions above later life security. Of the 24 participants in the study, 18 were not engaging in saving for later life at all, with only 3 of the remaining 6 participants engaging in a level of pension saving to ensure sufficient financial security for later life. 

Policy recommendations 

There is currently a paucity and fragmentation of government data concerning the extent to which precarious working conditions feature within the UK workforce. Part-time work, for example, often involves a more formal contract with a regular income.  However, individuals working part-time are struggling to survive financially and failing to save for their later life security; this research identifies both these financial difficulties as features of precarious lives. 

• Clearer lines need to be established defining which working contexts are insecure, with greater recognition of the financial limitations such insecurity brings to individual lives.  By gathering accurate representations and levels of insecurity amongst the workforce, governments are in a stronger starting position to observe the extent to which financial constraints are a problematic issue for workers in the present and in later life. 
• Government also needs to pay much more attention to the more financially vulnerable members of society, in relation to the pension system. Our research brings into question whether a pension system relying heavily on the private sector for sufficient income in later life is capable of providing long-term financial security in an increasingly differentiated and precarious job market.  As the findings from this study reveal, the present pensions system is failing precarious workers in achieving any form of adequate financial security in later life.  

As part of a long-term strategy, government needs to engage with, and work to remove or compensate for the financial barriers and inequalities that precarious workers face. This process must recognise that such financial barriers and inequalities exist beyond working lives, and appear in everyday lives in forms such as housing uncertainty.  In doing so, government will enable greater opportunity for more workers to think about and engage in later life saving. 

This article was originally published as part of our collection on the future of work in the UK, Working Futures. Read more evidence-led policy insight on this topic in the full online collection.