Tackling your debts

Is a variable income making it difficult to afford your repayments?

Posted 21 September 2016

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Find out how many people are on a variable income and how this can make maintaining payments more difficult.

Our recent research has shed light on the high number of people who are on variable incomes and the difficulties they can sometimes face when it comes to paying their essentials bills and meeting their repayments. 

11 million people in Britain have a job that means their income is variable. If you’re one of these people, and you’re finding it difficult to afford everything, you’re certainly not alone. Our research shows that two fifths of those on variable incomes struggle to pay essential bills like rent, household bills and their council tax. A similar number also find it difficult to pay back what they’ve borrowed on time, meaning they fall behind on payments like credit cards and loans. 


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If you’re self-employed, have a zero hours contract, a variable hours contract or your over-time hours fluctuate, then you’re classed as having a variable income. People living in London, Scotland and the East Midlands are most likely to find themselves with a variable income, whereas Northern Ireland has the lowest number of people with variable incomes. 

It’s also interesting to learn that there are fewer people in Northern Ireland struggling with essential bills and credit repayments when compared with the rest of the country. London has the highest number of people on a variable income struggling with their payments, which isn’t surprising when you consider the higher cost of living in the capital. 

Tips to cope on a variable income

So it’s clear from these stats that variable incomes can bring stress in some cases as well as flexibility and freedom. Fortunately, there are some things you can do to make budgeting with a variable income a little easier and some options if you’ve already fallen behind with important bills. 

Putting together a budget is the first step in good money management but how do you do this if you don’t know how much you’re earning month-to-month? Try to work out how much you earn on average in a month by adding up everything you’ve earned over the last year and dividing it by 12. 

If possible, try to save any extra money you make during a good month. This will tide you over should you hit a slower month further down the line. 

If you find that you’re hardly ever making enough to cover your outgoings or you sometimes get zero hours to work in a week, it might be worth looking for another job. Of course, if you specifically need your current job, for instance because of the flexibility it gives you, then this may not always be possible. 

It’s not a good idea to rely on credit to pay your regular bills, as you may find that you don’t have enough to cover your repayments on this borrowing. If you find yourself doing this regularly, then this is a sign that something is wrong with your finances. 

What happens if I fall behind with my repayments?

Falling behind with your bills and repayments can have serious consequences. If you were to fall behind on a credit card or loan, you run the risk of the account defaulting. A creditor will usually only issue a default when you’ve missed three to six payments and they will send you a warning before they do this.

Defaults will stay on your credit history for six years from the date that you get one. Any lenders or service providers that perform a credit check on you will be able to see the default and they may be less likely to lend to you, or only lend at a higher rate of interest. 

The creditor might also try and get a County Court Judgement (CCJ) issued against you, because of the debt. If they’re successful, they can then try to enforce the debt which can sometimes involve taking money straight out of your wages or benefits and sending bailiffs to your home. 

Even though it’s very important to keep up with your debt repayments, it’s actually more important to keep up with your essential bills. These are your council tax, rent/mortgage, utility bills, child maintenance payments, secured loans and court fines. This is because the consequences of missing these payments are potentially worse than the consequences of missing an unsecured payment, like credit card. 

Help with your repayments

If you’ve fallen seriously behind with your repayments because of your variable income, it’s important to get the help you need. The longer you leave it the worse the situation is going to get. You can get in touch with a debt advisor on 0161 605 4810, or click the ‘find my solution’ button above to see what your options are. 


*3Gem Research carried out online interviews with a nationally representative sample of 2,000 people between 29th June and 6th July 2016. 

**Figures extrapolated based on ONS UK adult population estimates for 2013 of 50.3m


by Christine Walsh

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