Over four million self-employed workers in the UK do not have insurance cover should they become critically ill, despite an over-reliance from families on their income, a new survey has revealed.
Just seven per cent of the self-employed workforce has critical illness cover, compared with nine per cent of the UK workforce overall, a study from insurer Scottish Widows has shown.
With the population of self-employed in Britain jumping to 4.79m in 2016 – representing over 15 per cent of all workers – as many as 4.3m were found to be without protection.
In addition, the findings showed that families of self-employed people depend more on their income than the average population, widening the so-called “financial protection gap”.
Two-thirds of self-employed people’s’ households in the UK relied solely on one wage earner, compared with just 52 per cent of the wider population.
As a result, the impact of losing their main source of income would hit self-employed people and their families the hardest. More than one in five self-employed workers said they wouldn’t be safe financially, while 12 per cent didn’t know how long they’d be able to keep paying their bills.
The survey also found that monthly outgoing costs among self-employed people were higher than on average, with rent and mortgage payments likely to be higher for the group.
Self-employed are more likely to have other debt too, with 36 per cent carrying over non-mortgage debt each month since July this year compared with 33 per cent on average.
Commenting on the survey’s findings, protection insurance specialist Jon Timpson said: “With so many families reliant on the income of self-employed people, it is absolutely vital that they have a back-up plan in place should the worst happen.
“Given the continued rise in the number who are self-employed in the UK, this research unveils a worryingly uncertain picture for a significant proportion of the workforce.”
Suprisingly, very few self-employed workers viewed life insurance as an essential business expense. While 78 per cent revealed that a mobile phone was a necessity, only 39 per cent considered life insurance vital.
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