This week our Senior Advisor Martin Coppack was in Parliament speaking at the launch of the Nest Insight report Fluctuation Nation: Lifting the lid on the millions of people managing a volatile income.
The report is the final part of Nest Insight’s Real Accounts project and looks at the challenges that people on irregular incomes face, which impacts more than 25 million people on low and moderate incomes in the UK.
The report identifies this as the ‘volatility premium’- the financial and mental impact of missing out on products and services because of an irregular income.
Examples of the ‘volatility premium’ include higher costs for credit and insurance or missed opportunities to benefit from cost-effective financial products, such as direct debits, interest-bearing savings accounts, or annual insurance payments.
There has always been a strong link between low incomes and irregular incomes, with many people being paid modest or low amounts also being on zero hour or short-term contracts. Irregular incomes exacerbate and sometimes cause poverty premiums. For example, direct debits can tip people further into debt because they haven’t been designed for people watching every penny and/or people who get paid irregularly – charging people if they don’t have the exact amount of money in their account at the same time every month.
We were pleased to see the recommendations of the report echo a number of our key asks on creating fairer systems for people on low incomes, including offering flexible credit options.
