15% of the UK workforce is now classed as “self employed,” but is everybody rolling in cash? Apparently not.
That is according to a leading debt charity who said they get thousands of calls from self employed people in debt every week.
This isn’t just at Christmas time. This is all year round. 52 weeks a year. 365 days. 24 hours a day.
Its estimated 57% of self employed people have debts of £10,000 or more. Loans and credit cards are the weapon of choice and making the minimum payments can be a challenge, which ultimately pushes them deeper into debt.
Not only that, but the debt charity estimate 25% of self employed people have debts of £30,000 or more.
This is not “good debt” either. This is bad debt. Really really bad debt.
The kind of debt that comes with high interest rates and ensures the self employed are kept in a pit of misery.
So what can be done to solve the problem? The debt charity suggests bringing the issue up in the Houses of Parliament so our government can take a closer look.
Perhaps making it more difficult for self employed people to get a loan, or introduce special loans for the self employed with lower interest rates? I’m sure they can agree on something.
For example, one idea is to introduce a “Single Financial Guidance Body” which will put everything under one roof, so to speak.
This will be a “one stop shop” for the self employed when they have any questions or issues about debt.
Some critics have argued that low incomes among the so called “gig workers” have contributed to this debt.
“If they are not getting paid much then a loan becomes attractive, but then they struggle to pay it back,” say the critics.
There are many gig workers out there who are just getting by. A few gigs here and a few gigs there, but the debt they have is just everywhere. It doesn’t matter if they are a freelancer, contractor or delivery driver…those loans and credit cards become a way of getting by.
Lack of business management skills has also been touted as a reason why so many self employed are in debt. They just don’t prepare well enough.
Could better education about self employment be a solution? In my opinion…yes.
Why not teach “business skills” in maths class instead of pointless sums such as “pie” and “algebra.”
Like you are ever going to need them…I think not. You are going to need “business sums” though. That I can guarantee.