Half of low-paid workers couldn’t afford surprise £200 bill

Unexpected costs like your boiler or washing machine breaking down rarely come at a convenient time.

But surprise expenses can be a particularly big problem if you’re on a low income.

In fact, research from the Living Wage Foundation shows that almost half (45%) of low-paid workers don’t feel confident they could afford an unexpected but necessary cost of £200.

That’s partly because one in four (24%) don’t have any savings at all.

And at the same time, one in five (19%) have less than £10 left over each week after they’ve paid for essentials like food, energy and housing costs.

So if you’re on a low income, how can you make yourself more resilient and be confident that an unexpected cost won't tip you into serious financial trouble?

Build a rainy-day fund

If you have a pot of money set aside for emergencies, you can cover unexpected costs without resorting to borrowing or dipping into savings.

A good goal is to have enough saved to cover around three months of your living costs - things like rent, bills, food and transport. 

Of course, that will sound a lot - and perhaps even unrealistic - if you’re already struggling to cover your essential expenses.

But you don’t need to save hundreds right away. 

Even if you only put aside £1 a week, it’s better than nothing. 

So why not take small steps like putting your spare change in a jar at the end of each day? 
 
And then at the end of the month, you can put it into a savings account. 

Life doesn’t give much warning, so if you have a financial shock, such as losing your job or a sudden repair bill, having even a little bit of money put aside can take away some of the stress.

Check out our tips on how to build up a rainy-day fund to help you get started.

Many low-paid workers in serious hardship

An unavoidable truth is that many low-income workers are already in serious financial difficulties, so saving simply won’t feel like an option.

According to the Living Wage Foundation, three in five (59%) have faced situations such as:

• having to skip meals regularly
• being unable to heat their homes
• falling behind on bills
• taking out a pay-day loan to cover their essentials 

Meanwhile, two in five (42%) have been forced to use foodbanks.

And that goes up to over half (56%) of low-paid workers with dependent children.  

So what are your options if you’re in this situation?

Don’t struggle alone

If you’re finding it hard to keep up with your essential expenses, then don’t suffer in silence.

Check your benefits

You might be eligible for financial support from the government so find out what you could claim.

You can either give us a ring and we’ll check for you, or use our free benefits calculator to see what help is available.

Create a household budget

Keep a close eye on how much money you have coming in and where it’s going.

You’ll then be able to see where you can make savings and free up cash for vital expenses, such as rent, mortgage payments and household bills.

Check our guide on how to create a budget to get started.

Tackle problem debts

If you’re struggling with debt, then get in touch for confidential, practical and impartial debt advice, and we can discuss what options are open to you.