Research by LV has shown that people who are self-employed are less able to save than their employed counterparts. In fact, four out of ten self-employed people have said that they are unable to save money on a regular basis. This is putting themselves, and their family, at financial risk.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it.
The rise of the self-employed
According to the Office for National Statistics, there are around 4.80 million people who are self-employed in the UK. This equates to 15.1% of people in work.
There has been a dramatic shift in the number of people who are choosing to become self-employed over the last 15 years. This upward trend has had a positive effect on the UK employment sector, which has seen a rise from 70.1% in 2011 to 74.2% in the first quarter of 2016.
Barriers to saving
Research that was conducted on behalf of LV, has shown that around two million self-employed fail to save any money each month, and one in ten struggles to save more than £50 each month.
This inability to save money is putting themselves at risk of financial difficulty. The Money Advice Service recommends that we should have at least three months money in savings to cover your outgoings.
The biggest barrier that prevents many self-employed from being able to save is that their monthly cost of living takes up most of their income.
This includes things like rent, utility bills, food and paying off debt, like credit cards.
Being self-employed also means that their income is likely to fluctuate throughout the year. There may be months where they are riding high and months where they are struggling to find work. The self-employed also don’t receive work benefits, such as sick and holiday pay. So, a day taken off sick is a day with no income.
Protect yourself with Income Protection Insurance
It is recommended that those who are self-employed take out income protection.
Yet, this research shows that only 4% of people who are self-employed have this in place to protect themselves.
The cost of income protection varies according to the level of protection required and for how long, plus other factors.
It is worth speaking to a financial adviser to see if income protection is an option you should consider.
Are you struggling to save?
Dental & Medical Financial Services have been helping doctors and dentists with creating robust savings plans for over 25 years.
Tel: 01403 780 770