A report by The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) titled Economic Insecurity: The case for a 21st century safety net has urged the government to embrace “Singapore-style” personal learning accounts to help workers develop skills for jobs of the future.

A survey by the society found that economic insecurity is widespread; 73 per cent of workers fear inflation will outstrip pay, and 59 per cent would struggle to pay an unexpected bill of £500. More than a third (36 per cent) would find it difficult to pay a surprise bill of £100 – with this figure rising to 44 per cent for those on zero-hour contracts.

The RSA also found that 30 per cent of workers don’t feel like they earn enough to maintain a decent standard of living (up from 26 per cent in 2017), while 24 per cent of workers sometimes have trouble meeting their basic living costs because of income volatility (up from 19 per cent in 2017).

Almost half (49 per cent) of workers fear the effect of Brexit on living standards, 26 per cent are concerned about losing their job to automation, while 35 per cent fear that the rising cost of housing may force them to relocate.

The report calls for a new “21st century safety net”, with a greater role for unions, digital start-ups and civil society in helping with retraining and income support.

Among all workers, retraining is the option most workers think would help them the most, backed by 27 per cent. But 34 per cent of those in non-typical work feel they would benefit most from a contract with guaranteed hours.

The report examined how other countries deal with economic insecurity. Singapore has introduced “personal learning accounts” with budgets for training for every worker to help adapt to tomorrow’s jobs. Meanwhile in Sweden, the state encourages employers to contribute to funds to help workers transition during periods of redundancy.

Fabian Wallace-Stephens, report author and senior researcher at the RSA, said: “More people are in a job than ever, but below the surface of record employment figures, increasingly we are seeing the link between hard work and fair pay collapse; work alone is no longer a route out of poverty.

“This could not come at a worse time for millions of families amid Brexit uncertainty, the potential for another a recession and the increasing prospect of automation of many routine roles.

“Economic insecurity is creeping-up the income scale and is no longer just confined to those on low-incomes. Many of those ‘just managing’ are a financial shock away from failing to pay rent or pay a childcare bill, while even people on higher incomes fear the grinding effect of inflation, flatlining pay and falling living standards.

“Neither the labour market nor the welfare state alone can turn automation from a problem to an opportunity for workers. We need to see government creating the framework for employers, civil society, unions, social enterprises and digital start-ups to provide more help, including retraining and income support, while legislating for stronger rights for workers and a genuine living wage.”