Monthly pay forcing more into debt. Campaign for weekly pay for lower incomes.

amg1712

With everyone being told 'we need to tighten our belts', it seems that some basic steps have been over looked in the austerity measures we all face.

If the recession is not bad a enough. Employers are not helping things aswell. More and more on low income are being pushed into monthly pay direct to the bank. It strikes me as odd that we are being told to go out and spend to keep the economy going. This may soud fine, but in reality many of us can't cope with this arrangement of monthly pay. This is often the first step into getting into finacial trouble. After borrowing from family and friends to see you through the month. The next step often becomes loans. and now we are bombarded with adverts for these pay-day short term loans at ridculous rates of interest.

The monthly pay-check, becomes feast then famine within days. Living on low wages becomes a hand to mouth existence, therefore very few can budget for future expenditure. Day to day expenses of buying basic food items or just bus fares become very very difficult for many to manage.

If you worked for 16 hours a week on minimum wage, do you think you could wait till the end of each month? Even 40 hours a week on minimum wage becomes very difficult especially financing your first month.

What happens to those in the short term when business collapse.

I appreciate that there is additional costs for employers, to pay weekly, but this is nothing to the costs they would have had, years ago when they had to employ more people to sort cash into envelopes for a Thursday pay-day.

If a 'bacs' payment through a bank costs an employer, let say 35p. Then surely that so many would have to use it, this price could be driven down. Employees may even find this acceptable cost to themselves.

If you have surplus money or larger incomes then financing monthly becomes a lesser issue. With banks readilly offering better deals on loans and overdraughs. This is the reason to campaign to goverment to make it maditory for employers to make payments weekly to the low paid. Especially if we want people to keep the economy going.

My view would be to make it compulsory for employers to pay weekly to all those earning under £25,000 a year. At the same time, we need better education on a very simple money management and how to budget, before people get into trouble. How to save, rather than impulsively borrow, to get what they want.

I think this is a massive issue that gets overlooked by governments and employers who want to hang on to your money for longer.

Andy

System

amg1712 wrote: »

[STRIKE]My view would be to make it compulsory for employers to pay weekly to all those earning under £25,000 a year. At the same time,[/STRIKE] we need better education on a very simple money management and how to budget, before people get into trouble. How to save, rather than impulsively borrow, to get what they want.

I've corrected it for you. The above is the only relevant bit.
Having been monthly paid for 35 years I have never had a problem, all it needs is a bit of financial discipline.

Littleoldme

Given that most bills I pay (mortgage, council tax, gas, electricity, insurance etc) are monthly I find it easier to budget on a monthly salary. I was paid weekly when I was temping and found it alot harder as you had to work out what was due when and constantly watch to see that the right money was in the bank.

Becles

I think monthly pay is easier.

Deduct all the monthly bills that are going to come out that month, then divide what is left by 4 or 5 (depending on how many weeks in the month) and that's your weekly spend limit until next payday. Simples!

As a single working parent on a low income, that works for me.

If you choose to spend loads in the first part of the month and don't have enough money at the end and have to borrow, then you only have yourself to blame.

lilykim

I work for a very "traditional" office, where we get paid weekly. I do manage very well this way. I do a weekly budget on paper but I do have to be very good about putting money away regularly to pay monthly bills.

podperson

People who are incapable of sticking to a simple budget are going to struggle whether they get paid weekly or monthly - harsh perhaps but unfortunately true.
I've been paid monthly and weekly - am currently on weekly (and yes am well under what you've classed as a 'low income' before you ask) and end up converting it to monthly for my budgeting as all my bills come out on a monthly basis. When I was paid monthly all the bills were set up on direct debit for 5 days after my pay day (to account for any delays or weekends) what was left after they came out was my food and spends for the month - not ridiculously complicated surely?
Now I'm on weekly I have to spread the bills out throughout the month, make sure I don't go over my 'weekly allowed spend' so I have enough left for when the bill is due and sometimes have to put one back a week if it's been a short month the month before - I find it much harder work and for someone who was tempted to overspend I think it would be much easier to do so when they have say an extra £200 sat in their account each week 'waiting' for the rent to come out.

lincroft1710

amg1712 wrote: »

My view would be to make it compulsory for employers to pay weekly to all those earning under £25,000 a year.

Quite apart from the fact that your idea is contrary to the way most employers have been working for the past 50 years, which political party do you think would be stupid enough to propose such legislation were it in power?

InsideInsurance

I struggle to see how someone who is incapable of making sure they retain enough of their monthly pay to pay for food etc near month end is going to be able to capable of saving a significant amount of each weeks pay to pay those large ticket once a month bills like rent/mortgage, gas, electricity etc.

I do think it is easier to have all money come in one day, all large expenses go out the next day and whats left you have to manage across the rest of the month.

Back in my days of weekly pay so many were saying they were supposed to set aside £40 of their £100 pay for rent at month end but then on a team night out decide actually they'd spend it this week and next week just save £80.... needless to say wasnt long before they were behind in their bills

lozza1985

My husband has been on monthly and weekly pay, is back on monthly pay now. We found weekly pay was much harder, he had to make sure he had enough in his bank account for his bills (car insurance, petrol etc), before he could transfer money to the joint account for the household bills which obviously come out once a month, and working shifts some
Weeks he earnt hardly anything. We find it far easier to have the monthly bills go out a few days after one of us have been paid, then we know what we've got left for the rest of the month.

amg1712

Yes in many ways you are correct. Certainly money management and budgeting is extremley important and very easy to say when you have a level of control over your finances. Perhaps you may or may not know people in this situation.

I have made my comments from talking to many people. People who have to rob Peter to pay Paul on a monthly basis, to stay ahead. Many don't have a problem with acconting for their Direct Debits, its the day to day and additional expences that push them into the arms of these pay day loan sharks.

Perhaps we realy need comments from those who are struggling aswell.

Back to budgeting. More work needs to be done in this area. Self discepline is concept that we need hear more of.


Thanks

podperson

Erm, budgeting is what gives you control over your finances and whether it comes easy or not it's what people need to put in place if they want to have any chance of keeping up with their bills. I know people who struggle, I have struggled drastically in the past - I am still on a very low income and my partner is unable to work due to health problems so I have been solely responsible for keeping us afloat since I was 18. I have done pay day loans, I have done Provident, I have gone hungry when my money ran out and hidden behind the couch from the landlord - is that struggling enough for you?

And I can say in complete confidence that being paid weekly instead of monthly would not have made the blindest bit of difference. If you think these people you have spoken to would be better off then you obviously don't know their full situation - either they have enough money to cover their expenses, in which case they need to budget better and find out where the surplus is going, or they don't (as I haven't several times) and so when the wage comes in would make no difference, except that it is more tempting to spend the 'set aside each week' money for the rent, council tax etc when you've been living on beans on toast for a week.