The self-employed lack financial protection for long-term ill-health
The research from Scottish Widows finds that the collective cost of this lack of financial protection could be over £300bn. Taking extended sick leave would cost the self-employed an average of £67,550 each per year.
Scottish Widows said the self-employed were putting their hard work and financial resources at risk. The average business owner commits an average of £9,700 and six-and-a-half months of their lives setting up their ventures.
Four in ten (42%) uninsured, self-employed workers insist they don’t need critical illness insurance or don’t see it as a financial priority.
The UK’s small business owners are taking risks in other ways: half admit that they don’t insure crucial equipment, such as laptops and tools. 70% of all self-employed people don’t have life insurance in place to protect their dependents.
The self-employed have fewer protections in place should they fall ill. Statutory sick pay is not available, with most reliant on employment and support allowance, or the new universal credit. ‘Support for Mortgage Interest’ – the only safety net in place for many families if they are unable to pay their home loan – only kicks in after 39 weeks for many people.
Many rely on personal savings: the average self-employed worker has enough personal savings to last an average of 9.2 months if they were unable to work. Almost two-thirds (62%) of self-employed workers said they have no other source of income outside of their business, and a third (34%) admit that if they were unable to work due to illness, they would have no other resources or income to rely on.
Jackie Leiper, protection director at Scottish Widows: “Self-employed workers put immeasurable amounts of time and money into getting their businesses off the ground, but our research reveals that they’re failing to protect their greatest asset – themselves.”