- A volatile income is one which peaks and dips rather than being consistent
- The Real Accounts project is a collaborative 10-month financial diaries study led by Nest Insight with the Centre for Personal Financial Wellbeing at Aston University and the Yunus Centre at Glasgow Caledonian University
- It follows previous reports on volatility profiles and the real-life strategies used to manage fluctuating incomes.
A new report has found millions of people in the UK face financial challenges due to income volatility, a pattern of earnings that peaks and dips rather than remaining consistent.
The latest report from the Real Accounts project, a collaborative 10-month financial diaries study led by Nest Insight with the Centre for Personal Financial Wellbeing at Aston University and the Yunus Centre at Glasgow Caledonian University, highlights what experts call the ‘volatility premium’.
This affects millions of people in the UK who have a volatile income, by adding extra costs and creating additional strain in managing their finances, particularly because financial products, policies and workplaces are all designed around the assumption of regular incomes.
As the third and final report from the Real Accounts programme, it builds on earlier insights into income volatility, detailing the strategies people use to cope and the unique challenges faced by different groups. To address these issues, the report calls for a combination of inclusive policy design, employer initiatives, financial sector reforms, and community support.
Dr Hayley James, a senior research fellow at the Centre for Personal Financial Wellbeing and Research Fellow at Nest Insight, who presented at a recent webinar to launch the report, said:
“The volatility premium that Real Accounts has identified is a really significant challenge facing the growing number of people who experience volatility in their income in the UK.
“The financial diaries methodology has been instrumental to lift the lid on their experiences and recognise the pinch points that contribute to the volatility premium.
“A core aim of the Centre for Personal Wellbeing is to better understand how people practice finance in their everyday lives, and to encourage change to effectively support them, and we are really proud of how the Real Accounts programme is contributing to a more realistic understanding of what it means to have a volatile income.
“I’d like to extend my gratitude to the Aviva Foundation, Fair4All Finance, and the Money and Pensions Service for their invaluable support of this project.”
Watch the webinar from the launch event for the report ‘Fluctuation Nation’.
You can also visit the Real Accounts programme page to learn more about the research and access all outputs.
- Notes to Editors
About the Centre for Personal Financial Wellbeing at Aston University
The Centre for Personal Financial Wellbeing at Aston University is an interdisciplinary, academic, research centre that seeks to get to the heart of the causes and consequences of personal and household financial insecurity.
It focuses on providing accessible and timely insights to support a wide range of leaders and decision makers including those in the financial service industry, third sector organisations, academics as well as the general public.
For more information, visit the Centre website.
About Aston University
For over a century, Aston University’s enduring purpose has been to make our world a better place through education, research and innovation, by enabling our students to succeed in work and life, and by supporting our communities to thrive economically, socially and culturally.
Aston University’s history has been intertwined with the history of Birmingham, a remarkable city that once was the heartland of the Industrial Revolution and the manufacturing powerhouse of the world.
Born out of the First Industrial Revolution, Aston University has a proud and distinct heritage dating back to our formation as the School of Metallurgy in 1875, the first UK College of Technology in 1951, gaining university status by Royal Charter in 1966, and becoming The Guardian University of the Year in 2020.
Building on our outstanding past, we are now defining our place and role in the Fourth Industrial Revolution (and beyond) within a rapidly changing world.
For media inquiries in relation to this release, contact Sam Cook, Press and Communications Manager, on (+44) 7446 910063 or email: s.cook2@aston.ac.uk
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