Self-employed less able to pay their debts
People who are their own boss are still less able to repay their debts than those in conventional 9-to-5 jobs, proving that fears over self-employed indebtedness not abating were well-founded.
Looking back at its 10,000 callers of 2010, the self-employed team at debt charity CCCS said only 17 per cent had sufficient reserves to be put on a debt management plan.
This compares with the average of 27 per cent for clients overall, indicating that a repayment plan can be reached for almost a third of callers, assuming they are not self-employed.
Similarly, avenues to boost income were available to almost half (48 per cent) of general clients – whereas only 31 per cent had such options if they were worked for themselves.
“Part of the problem is that an increasing number of people who have been made redundant are deciding to set up their own business instead of seeking employment elsewhere,” CCCS said.
Compounding the situation, and putting strain on their personal finances, was the lack of work that emerged after some newly self-employed people had invested in training courses.
“The problem for most self-employed people who seek our help with their debts is that they have very low income levels,” said Geoff Waugh, head of the CCCS Self-Employed Centre.
“Not only are a large proportion not earning enough to repay what they owe, a significant number don’t earn enough to cover the cost of day-to-day living.”