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What is Gig economy?

What is meant when we say ‘gig’ economy? It is a phrase which is increasingly coming into use and is particularly prevalent in connection with employment disputes.

gig-economy

The definition of a gig economy is “a labour market characterised by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs”.

This can be looked at in two ways. It either means a working environment which offers flexibility in regards to your employment hours or it could be used to explain a working environment which exploits its workers which very little in place in terms of work place protection.

According to official figures, around 3 million UK workers have worked in the gig economy in the last 12 months. In the last year, those who were self-employed are said to, on average, earned more per hour and per day than staff. This offset the lack of employee benefits which are granted to those who are employed, such as pension contributions, paid leave or sick-pay.

However, when 2018 hit, the gig economy really began to skyrocket and now there appears to be a different situation for those who are self-employed. A report conducted by the government found that one in four workers which took part in the survey were earning actually earning less than £7.50 an hour. To put this in perspective, the national living wage to be earned by someone over the age of 25 is £7.83 an hour.

The flexibility of a gig economy

Instead of workers getting paid a regular and consistent wage, in a gig economy, the worker gets paid for however many ‘gigs’ they do. This could be from delivering food for a company like Ubereats or Deliveroo or for making a car journey for a company like Uber or Adison Lee.

deliveroo

Those who favour a gig economy push that workers highly benefit from the flexible hours which it is said to provide. Under a gig-like system, people can choose how much time they work and when they wish to carry it out. In turn, they can have a far more flexible lifestyle and easily juggle other commitments in their life. It is proposed as a great situation for parents with young children as they can choose when to work in order to fit around their children’s schedule.

Workers’ rights

Worker’s in a gig economy are technically classed as independent contractors. Because of this, they are not protected against things such as unfair dismissal, they have no right to redundancy payments and no right to even receive the national minimum wage, paid leave or sickness pay.

The website WhatIsMyDayRate.com aims to provide a simple structure for freelancers by highlighting what their day rate needs to be in order for them to achieve whatever their desired annual salary is. It is appreciated that moving from a salaried job to a self-employment role can be rather tricky.

Workers who are functioning in a gig economy should aim to protect themselves by charging a fair fee for their work. Many people use the gig economy as a way to label those workers as unskilled labour, rather than recognising them as professionals.

A new way of working?

freelance

It is worth noting that there are differences between those working in a gig economy and those who are on zero-hours contracts. Like zero-hour contractors, gig economy workers do not get guaranteed hours or do not receive much security in their employment status from whoever employs them.

However, a zero-hours contractor can expect to be entitled to holiday pay, whereas a worker in a gig economy cannot. Neither is entitled to sick pay, nevertheless.

For employers, a gig economy can be very beneficial. Now, they can get a lot of work done for them without having to commit to taking on actual employees who will demand certain demands. The Independent reports that 75 per cent of UK business leaders have said that there are a significant number of contractors as part of their team. 12 per cent of these say that they use gig workers as part of their overall workforce.

Obtaining Finance

pounds

Gig workers can expect to be financially excluded when it comes to obtaining third-party money, such as credit cards or loans. This is because their proof of stable income is lacking and therefore lenders may be more cautious about granting any type of loan.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
 
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”https://www.paydaybadcredit.co.uk/direct-lender/” data-mce-href=”https://www.paydaybadcredit.co.uk/direct-lender/”>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html” data-mce-href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html”>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”https://www.gov.uk/county-court-judgments-ccj-for-debt” data-mce-href=”https://www.gov.uk/county-court-judgments-ccj-for-debt”>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.