81% AREN’T SEEKING FINANCIAL ADVICE
Self-employed people are at risk of financial hardship if they don’t have sufficient provision in place. Without a regular income, it can be difficult to cover expenses and also save for the future. In many cases, the self-employed are unable to claim for many of the benefits that employees are entitled to, including statutory sick pay.
Being self-employed also means you don’t have the luxury of having an employer to rely on for sickness cover or health insurance, which can make you extremely vulnerable to loss of income or unexpected financial shocks.
WITHOUT A REGULAR INCOME
So if you’re self-employed, it’s essential you’re prepared for anything by having the right protection in place. According to new research, over half (57%) of self-employed workers in the UK rely on personal savings when they are not working, yet a worrying 81% aren’t seeking !financial advice.Being self-employed can offer numerous benefits, such as !flexible hours and the opportunity to work with a wide range of people, but self-employed workers can also face !financial vulnerability. Over two-thirds (64%) of those who are self-employed in the UK revealed they are without a regular income, with just one in five (23%) receiving a monthly pay packet.
OWNING A BUSINESS
The research also found that almost half (48%) of self-employed people see their income !fluctuate as a result of owning their own business, with a similar proportion (49%) putting this down to being a freelancer, contractor or consultant. As the cost of living rises and private rents in the UK increase at the fastest rate in five years, a quarter (24%) of those surveyed said they only had enough money to cover such costs for three months if they were unable to work.
VULNERABILITY TO FINANCIAL SHOCKS
With the research highlighting the group’s vulnerability to financial shocks and the importance of expert financial advice, one in three (31%) of those surveyed don’t think they can afford professional advice, while one-quarter (24%) say they hadn’t thought about seeking professional financial advice.
Not being eligible for Statutory Sick Pay (SSP) can prove a real problem for the self-employed and their financial resilience – during the pandemic, a fifth (21%) of all applications to the Test and Trace Support Payment scheme were from this group, according to a Freedom of Information request by The Community Union.
SECURE FINANCIAL PROTECTION
And while many have taken steps to secure financial protection for themselves and their families, 13% of self-employed workers in the UK still don’t have critical illness cover or life insurance. Of these respondents, just under a third (31%) said these forms of protection aren’t a financial priority, one in four (25%) said they were prepared to risk not being covered, while a similar amount said they didn’t require these policies (27%) or couldn’t afford them (24%).
HOW CAN I PROTECT MY INCOME WHEN I’M SELF EMPLOYED?
When you’re self-employed or a contractor, you get the perk of being your own boss, but you wave goodbye to traditional employee benefits like company sick pay. Getting income protection is one step you could take to provide a financial safety net if you’re unable to work because of illness or injury.
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Source data: The research was carried out online by Opinium Research across a total of 2,002 UK adults (Booster sample of 502 self-employed workers and 1,015 Renters). Fieldwork was carried out between 21!27 October 2021.