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Sole traders run risk of cash crisis
41% of self-employed people struggle to save any money each month, leaving them exposed to financial problems.
Leading insurer LV= polled 9,495 self-employed workers and found only 11% save less than £50 a month.
In addition, 1 in 3 respondents said they could not survive for more than 3 months if they lost their income.
62% of sole traders said monthly bills prevent them from saving cash each month, compared to the national average of 56%.
Furthermore, 33% feared being hit by unexpected costs, such as home maintenance and repairs, compared to the national average of 28%.
Most worryingly, just 4% of those polled have income protection while 42% mistakenly believe they are ineligible for it.
The findings on income protection are particularly alarming when:
- 28% are worried about not being able to work due to an accident
- 29% are worried about becoming unwell.
Justin Harper, head of protection policy at LV=, said:
"It's often the case that self-employed people lack the safety net of an employer's benefits, such as sick pay.
"This means they risk having to rely instead on state benefits, which can involve a lengthy application and wait with no guarantee of any support.
"Self-employed people should speak to a professional about whether they'd benefit from taking out private insurance, such as an income protection policy, that will pay out if they couldn't work because of accident, sickness or disability."
Talk to us about income protection.