Sticking to a strict budget for all of your bills and expenses can be tough, especially if you’ve not got much spare cash left at the end of the month. And this could be even harder if you don’t always earn the same amount because of flexible working hours.
One reason for this could be if you’re on a zero-hours contract. The contracts are highly controversial as they mean you’re not actually guaranteed to work at all, leaving some workers unable to afford their bills.
But it seems the tide could be turning on this type of working. Sports Direct, one of the most high-profile users of zero-hours contracts, has now pledged to offer staff guaranteed working hours instead.
With this news, we are going to look at zero-hours contracts in more detail and how to budget when on one.
In 2015, an investigation by the Guardian exposed Sports Direct for its shortcomings. The company was found to be paying its depot workers hourly rates of pay below the minimum wage and many were on zero-hours contracts.
The results of a review commissioned by Sports Direct were recently released. The sportswear retailer says it will now offer casual retail staff at least 12 guaranteed hours a week, instead of a zero-hours contract. All staff are to be paid at least the minimum wage.
According to figures from the Office for National Statistics (ONS), around 900,000 people did not work a guaranteed minimum number of hours between April and June.
This is an increase of up to 21 per cent from the same period of last year. During this time, only 747,000 people were on zero-hours contracts. The figures mean that 2.9 per cent of all employed people are on zero-hours contracts in comparison with 2.4 per cent last year.
If you're unfamiliar with what a zero-hours contract is, it's basically when an employee works on a casual basis and isn't guaranteed a set amount of hours to work in a week. You might find this type of work attractive if you're looking for flexible work or for your job to fit around another responsibility such as a university degree.
But it can be hard to know when you'll next get paid and how much this will be. A knock on effect of this is that it can be particularly tricky to budget if you're on a zero-hours contract and make sure all of your responsibilities are covered for.
Budgeting on a zero-hours
There's no getting around it – budgeting on a zero-hours contract can be tricky. The best thing to do if you're not sure how much you'll be bringing in each week is to start building up some emergency cash. So if you get a good amount of work one week, put away some money for the weeks when you only work a couple of hours.
This can be hard to do but you should start by working out how much you spend every month on household bills and other financial commitments. Once you know this, try and put some money aside once you have a good few weeks of working steadily.
Your aim should be to save up enough money to cover all of your bills for two or three months. This money will come in handy if you have a few weeks where you're not earning as much as you need to.
To give your income a boost, you should check to see if there are any benefits available to you. Depending on the amount of hours you work there are certain benefits available if you work less than 16 hours a week. Or there is a range of benefits if you work 16 hours a week or more – check these out to make sure you're getting all the help you can.