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Intergenerational planning: The gig economy

20 November 2018

The gig economy is the fastest growing sector in the UK, but only 2% of independent gig workers have access to protection. Debra Hale asks if advisers can help...


It’s fair to say that technology has taken over. Whatever did we do without the internet or smartphones? Communication today is fast moving, no doubt about that – we communicate constantly, Googling, instant messaging and checking our social media feeds.

We are moving away from PCs and laptops even, using tablets, smartphones, watches and TVs to facilitate these instantaneous interactions.

When we buy anything these days we are more likely to research products and services online, comparing and qualifying using feedback and reviews. When we get quotes for insurance cover we tend to use aggregator sites, those enablers of a slicker user experience. It’s so easy to obtain comparison quotes then click through to buy the chosen product. As the meerkats say: “simples”.

Who among us has not got either an Amazon, Netflix or Facebook account? Not many of us can say that; whether we like it or not, we have embraced these companies.

‘One click to buy’ solutions by companies such as Amazon create slick and easy buying habits. Brands can nudge consumers to make decisions on what they buy as their data analysis pushes preferred products and services their way.

Amazon is having a huge effect on us as consumers. I swear my smartphone hears me; if I say I want to buy something, it will promote advertising for those products via social media and direct me straight through to my Amazon app where one click later my delivery is scheduled to arrive the next day.

This leads me nicely onto my subject matter – the gig economy...


The gig economy has always been around, but it’s evolved in recent years. Technology influences combined with the social need for immediate communication and instant gratification has had an effect on the way in which many people choose to work.

There are more self-employed in the UK than ever before, more entrepreneurs, greater tendency to chop and change careers or move from employer to employer. Our grandparents and parents would have had the aspirations and reality of a job for life, but many of us have not had that arguable luxury. Certainly our children and their children will not have a job for life and perhaps aspirations have evolved too.

Also there are more working mothers now than ever before: three-quarters of mums now work either part- or full-time and are looking for different ways of earning an income to support their families. Working flexibly is the new norm. Most of us aspire to having a healthy work/life balance, so flexible working is becoming part of normal working practice.

What is the gig economy?

The gig economy is the fastest growing sector in the UK, encompassing around five million people – an increase of 50% since the turn of the millennium. Around 15% of the working population are now, in fact, self-employed and that figure is on the up too.

It’s a labour market characterised by short-term contractors – independent workers in short-term engagements.

Who works in the gig economy?

Examples of a gig economy worker could be a mobile hairdresser or a swimming instructor, a cab driver, a delivery driver – they take their work with them, on the move, from gig to gig.

This labour market includes self-employed people, but also accounts for people using or sharing gig economy platforms like Airbnb, Uber, eBay or Deliveroo as their main job, or to supplement income to their main employment.

Many middle-aged people and even retirees are involved in this economy. Airbnb is a good example; I’ve come across a number of retired people who now rent out spare rooms and properties through Airbnb to enhance their income. And back to my favourite topic it seems, my Amazon delivery man Jan (he’s Dutch) is a 73-year-old retiree who likes to ‘get out and about’ as he puts it. He enjoys the job, the extra income and meeting people.

Is it a generational thing?

Millennials are perhaps more likely to embrace the entrepreneurial and freedom aspects of working in this way, but it’s not just our youngsters who work within this sector. Nor is it confined to those who work in lower paid jobs with zero hours contracts; this is a way of working that many now choose as a means of fitting work into their lifestyles and family networks and to take advantage of opportunities that come their way.

I was speaking to a cab driver just last week about his work and he told me that he was previously a fully qualified banker, but found that he was missing out on valuable family time so took a change of career path.

He is fairly well paid, can choose his working hours to fit in with his family and he meets interesting people like myself! A very happy man, I have to say.

Why does the gig economy matter?

The gig economy is currently very topical and is receiving attention from the government. An independent review of modern working practices by Matthew Taylor, chief executive of the Royal Society of Arts, which was commissioned by the government and published last July, raised many concerns and risks.

Changes in the labour market calls into question established norms and how our current legislation in the UK fits with these developments. These changes have impacts on ordinary people, who may be less certain about their rights, or who might feel that the system doesn’t accommodate the reality of their working relationships.

It also has repercussions for the state, which sees the fiscal impact of rising self-employment.

How are individuals most affected?

There has recently been media coverage of a court case involving a plumber who worked for Pimlico Plumbers. According to Pimlico, he was self-employed. However, he drove a company van, wore a company uniform and had contracted working hours, so the court ruled that because of how he was controlled by Pimlico he was deemed employed. There have been similar cases with Uber and Deliveroo, but this particular court case has definitely increased the focus on employment status issues.

There are of course inherent problems with this flexible way of working, as those working in this manner do not get entitlement to holiday pay, sick pay, health care, pension provision or death-in-service benefits, so there is much at risk if things go wrong for them.

How can advisers help?

Our ‘Restless Worklife’ research found that only 2% of gig economy workers have access to life insurance, critical illness cover or income protection. This research highlights that there is a clear need to advise these clients. By the very nature of how these individuals choose to work, there is a strong desire to create a career or working culture that enables their lifestyle and generates an income in a way that suits them, yet 98% of them risk that income and lifestyle by not protecting it.

So there’s a desperate need to ensure that gig and self-employed workers have living benefits to safeguard their own lives as well as those of their dependants.

Debra Hale is a protection specialist at Zurich