One in seven workers face major pay instability – Resolution Foundation

Around one in seven (2.7 million) workers in Britain have experienced major pay instability, with pay fluctuating by more than 25% multiple times a year, according to analysis from Resolution Foundation. 

The report, entitled ‘Unstable Pay’, found that among those regularly employed, only a quarter had stable pay, where monthly earnings stayed within 10% of their average.

Young workers aged 20 to 24 were most affected, with one in four experiencing erratic earnings.

While a rising minimum wage has lowered low hourly pay, earnings instability remains high among lower-paid workers, increasing financial stress and reliance on credit.

Workers experiencing erratic earnings saw an average monthly income change of 15%, equivalent to spending on essentials like food and clothing.

Instability in pay was particularly pronounced in low-wage sectors like hospitality and arts, where zero-hours contracts are common.

In contrast, among higher earners, fluctuations were often due to year-end bonuses, notably in finance where bonuses averaged 55% of March earnings.

The Foundation highlighted the need for more support to stabilise incomes and living standards, suggesting improvements in Universal Credit, financial resilience, and employer practices.