Self-employed vulnerable to financial shocks – BLOG – Leigh Clayden

October 1, 2022 10:47 am

New research highlights that 81% aren’t seeking financial advice

As more and more people reject the traditional working structure in favour of becoming self-
employed, some people could be at risk of financial insecurity as they lose out on employee
benefits that offer protection in the present, and financial planning for the future.

New research highlights this group’s vulnerability to financial shocks and the importance of expert
financial advice to open up conversations to ensure that all aspects of protection are discussed,
and that the right solutions are in place to help create financial peace of mind.

Facing financial hardship

If you are self-employed, you may not have the same safety net as those who are employed by
someone else. If you become sick or injured and are unable to work, you could face financial
hardship without income protection insurance.

Income protection insurance could help replace your lost income if you are unable to work due to
an illness or injury. It can give you peace of mind knowing that you will still be able to meet your
financial obligations even if you are unable to work.

Seeking financial advice

Over half (57%) of self-employed workers in the UK rely on personal savings when they are not
working, yet a massive 81% aren’t seeking financial advice according to new research[1]. Nearly
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.

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.

Vulnerability to financial shocks

As the cost of living rises and private rents and mortgages 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.

With the research highlighting the group’s vulnerability to financial shocks and the importance of
expert financial advice, worryingly one-quarter (24%) say they hadn’t thought about seeking
professional advice.

Secure financial protection

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.

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.

Not sure what you need?

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.

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.