Startling Number of ‘Gig Workers’ Have No Financial Protection

In Industry News, Protection by PCH Staff

Millions of Brits today are employed in what are known as “gig jobs”. This term is used to describe workers who are often independent contractors or freelancers, and are paid for each “gig” they do – instead of by the hour/day.

It’s a setup that both employers and individuals like because of the flexibility it affords. However, many such workers lack job security and miss out on other valuable rights, including sick leave, holiday pay, redundancy pay and maternity leave.

Now, a new survey has revealed that many of these so-called gig workers are seriously underprotected when it comes to things like life insurance, income protection and critical illness insurance.

Astonishingly, just 2% of gig workers have access to such protection via their gig employer. This is despite the fact there are five million people working in the gig economy in the UK – around 15.6% of the total full and part-time workforce (32 million people).

According to the YouGov survey for Zurich over half (53%) of these gig workers do not receive any benefits from the company they work for.

Almost a third would rely on state benefits

When asked how they would support themselves if they lost their regular income, 29% said they would rely on state benefits, while a further 16% would feel compelled to sell personal possessions. The “bank of mum and dad” would be the option for 19% of gig workers.

Interestingly, the poll also highlighted that a desire for protection among gig workers does exist. When asked to imagine they could have access to benefits for a 5% deduction in their minimum wage income, 28% of gig workers said they would opt for such a deal if it meant they had access to sick pay. A further 14% said the same for income protection, while critical illness and life insurance were cited by 12% and 8% respectively.

Zurich has called on the government to offer tax or national insurance incentives in an attempt to encourage the provision of income protection in the workplace.

In addition, Zurich would like to see gig workers become better informed about the benefits available to them and the advantages of protection, as well as greater awareness of the consequences of not having a financial safety net.

The insurance industry, Zurich said, needs to also provide the right products in the first place. This includes developing kite-marked products that can be adapted to suit gig workers.

Speaking about the findings of the survey, Chris Atkinson, head of consumer distribution at Zurich, said: “While the gig economy offers freedom for some it comes at the expense of financial security. This is storing up a potential welfare crisis for the state”.

Are you a gig worker? Would you need to rely on state benefits or the bank of mum and dad if you were to lose your regular income?

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