Britain’s army of 5 million self-employed faces a dire financial future and a penny-pinching retirement, according to a new survey.
Six out of 10 of the self-employed say they are only just making enough money to manage their bills.
Three-quarters say they have less than £200 of monthly disposable income – more than double the number of employed workers who say they are in the same financial position.
The same number have no pension – and fewer than half the remaining one in four who do have retirement savings have no idea how much they have.
Two-thirds of the self-employed claim they do not have enough money to save into a pension.
Hand-to-mouth existence
This extraordinary picture of life for the self-employed suggests many are surviving hand-to-mouth and are poor money managers.
The data from financial firm Drewberry shows the self-employed face a bleak retirement as only one in 10 contributes more than 10% of their earnings into a pension.
Only half of the self-employed have more than £1,000 in savings and just 1% have any income protection insurance to protect their finances should they suffer a prolonged illness or injury.
Just a quarter have life insurance.
The firm blames the research results on the growing influence of the gig economy and the lack of any long-term security in the job market.
Uberisation of economy
Drewberry director Tom Conner said: “This year’s results highlight the pressures that are being exerted by the ongoing Uberisation we’re seeing in the UK’s employment market.
“Money is now so tight for most self-employed professionals that a great many saving for retirement are now using what they should be setting aside for their pension to subsidise the here and now.
“Last year, our survey clearly identified that the growth of the gig economy meant that Britain’s self-employed were becoming a financial underclass. This year’s results show that nothing has arrested the decline.
“Today, the average self-employed Briton has far less discretionary income available each month than their employed counterparts with over 70% of self-employed respondents currently having £200 or less a month after meeting their regular outgoings.
“This explains why almost two out of three self-employed workers now describe their finances as just about managing or worse.”
