Nearly half (41%) of self-employed people struggle to save any money each month, leaving them exposed to financial problems.
Insurer LV= surveyed 9,495 self-employed workers and found one in three could not survive for more than three months if they lost their income.
Nearly two thirds (62%) of respondents said monthly bills eat up the majority of their wages. Furthermore, sole traders are more likely to be hit by unexpected costs (33%), such as home maintenance and repairs, compared to the national average of 28%.
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.”
28% of sole traders were concerned about not being able to work due to an accident and 29% were worried about becoming unwell. In circumstances where you are unable to work, there are protection policies available to help cover your costs.
Income protection pays out a tax-free percentage of your earnings, usually between 50% and 70%, until retirement, death or your return to work.
If diagnosed with a long-term illness or disability, critical illness cover can pay you a tax-free lump sum to cover your expenses.
To talk to us about your personal finances, contact Sue Stephens.