New data suggests the UK’s self-employed workforce is saving less than the UK average and spending more on bills. Without income protection cover, they are leaving themselves open to financial crisis.
Being self-employed is no walk in the park
There are many perks to being self-employed, as your friends are probably constantly reminding you. You are in control of your own time. You have complete accountability. You have freedom. Building a business and putting in the graft to help it grow is exciting.
But by no means is it easy.
The workload can be fierce and there are some serious financial pressures. Cashflow can be tricky to maintain. You have clients that pay you late. And then there are the overheads such as office space and the other costs associated with providing your products or services.
But that’s okay. Self-employed people earn a fortune. Don’t they?
Monthly overheads make savings a fantasy…
New research from Liverpool Victoria suggests many self-employed people are struggling to make ends meet. They spend more on monthly overheads than the UK average. And they are finding it difficult to save. Liverpool Victoria’s data suggests that just out of almost 5 million self-employed workers, around 2 million can’t afford to save anything from their monthly income. A further 11% can only afford to save less than £50 per month.
Could you survive on statutory sick pay?
As a self-employed professional, you don’t get the luxury of employee sick pay. So if illness or injury left you unable to work, you would be totally reliant on either your savings or statutory sick pay to cover your overheads. The government’s Employment and Support Allowance (ESA) amounts to just £73.10* per week (and can take weeks to claim). Would that be enough to cover your monthly outgoings?
It leaves you in a precarious position if something unexpected left you unable to work. And it’s one of the reasons that being self-employed can occasionally feel very unfair.
There is a way to preserve your cashflow…
Cashflow is crucial for self-employed professionals. Thanks to the nature of invoicing, it’s easy to see how one month out of work could leave you out of pocket for two – even three – months. How would you cope?
You could start by helping us to bust a myth. Many self-employed people believe that they are not eligible for income protection cover. That’s simply not true. In fact 33% of our policyholders are self-employed professionals.
But why bother with income protection cover?
Give yourself a safety net and build a savings pot for your future
For just a few pounds per month, you can get an insurance policy that can cover up to 70%^ of your income if you are unable to work due to illness or injury. We pay out on 97% of claims, giving you the peace of mind that you will be able to meet your overheads on time while you recover.
Even better, you can build a savings pot for your future with PG Mutual. Because we are a mutual – or friendly – society, we share our profits with our policyholders. When you join us we create an investment account for you that we top up each year from any profits we make. We aim to pay you a lump sum when you retire – no matter how many times you have claimed against your policy.
The longer you stay with us, the bigger your potential pot.
Ready to get started?
It costs less than you think to give yourself a crucial financial safety net. Get a no-obligation, instant quote online or email firstname.lastname@example.org or telephone 0800 146 307.
* DWP, April 2017
^ The limit you can claim is limited to 70% of your gross income or £1,200 a week (whichever is lower). For full Ts&Cs, visit www.pgmutual.co.uk