With more self employed than ever what are their risks
As more people reject traditional working structures in favour of becoming self-employed, some may face financial instability as they forego employment benefits that provide protection in the present and financial planning for the future. Protecting the vulnerable self employed is not a conversation that is being had enough though. With new research highlighting that 81% of self employed people aren’t seeking financial advice [1].
New study emphasises this group’s sensitivity to financial shocks and the significance of competent financial guidance. This can start talks to ensure that all parts of protection are reviewed and the appropriate solutions are in place.
The financial hardships the self employed face
If you work for yourself, you may not have the same safety net as people who work for someone else. Without income protection insurance, you may experience financial difficulties if you become ill or injured and are unable to work.
If you are unable to work due to illness or accident, income protection insurance may help you replace your lost income. It might offer you piece of mind knowing that even if you are unable to work, you will be able to fulfil your financial commitments.
The main concern here is your financial well being. Protecting the vulnerable self employed is a lot to do with making sure you have similar benefits that employed people get. Statutory Sick Pay is not enough for most people to survive on. So it’s important to make sure you have another safety net in place.
Being ineligible for Statutory Sick Pay (SSP) can be a real problem for the self-employed and their financial resilience; during the pandemic, this group accounted for one-fifth (21%) of all applications to the Test and Trace Support Payment scheme, according to a Freedom of Information request by The Community Union.
While many people have taken efforts to provide financial security for themselves and their family, 13% of self-employed people in the UK still do not have critical illness or life insurance.
Vulnerability to financial shocks
As living costs grow and private rentals and mortgages in the UK climb at the quickest rate in five years, a quarter (24%) of those polled indicated they only had enough money to pay such expenditures for three months if they were unable to work.
Despite the research emphasising the group’s sensitivity to financial shocks and the significance of expert financial assistance, one-quarter (24%) said they haven’t considered getting professional financial advice.
With income coming solely through your own work there isn’t as much of a safety net as with employed roles. Yes, you get added freedoms as well but self employed clients often experience ebbs and flows with their cash flow. Especially when a business is newly formed. Protecting the vulnerable self employed from these pitfalls is something that we can advise you on.
Seeking tailored financial advice to protect the 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. To discuss how we can help protect your future financial wellbeing and to discuss the options available to you, please contact us for more information.
We have a wide range of financial and insurance products that can suit your needs and budget. They are there to provide you with financial well being and security for the future.
Source data:
[1] 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.
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He holds a CeMAP qualification and has been advising since 2018, continually updating his expertise through ongoing training. Ashley's client-focused approach ensures personalized, effective advice, fostering long-term relationships. Outside of work, he enjoys playing football and exploring new countries. For personalized financial advice, Ashley is dedicated to helping clients achieve their goals.
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