Fewer self-employed declaring bankruptcy
A worrying jump in the number of personal insolvencies in Britain appears to affecting fewer self-employed people than had been feared.
In fact, in the last three month-period for which data are available, 838 bankruptcies were recorded where the person was self-employed, representing a quarterly fall of almost four per cent.
Compared to 2016, the fall in self-employed bankruptcies between July and September is even more pronounced, as it is decreased by 12.7 per cent, found The Insolvency Service.
Writing in its latest report, the service described the level of bankruptcy for people who run their own unincorporated (sole trader) business as having been “broadly stable” since the second quarter of 2015.
Reflecting on the report, insolvency body R3 said that over the 12 months of 2017, there were “pressures pulling indebted individuals in different directions.”
“On the one hand, unemployment was at or near record lows, which helped many stay afloat; on the other, wage growth has been poor, inflation has taken a bite out of disposable incomes, and much of the employment available can be insecure, making it much harder for people to budget,” it said.
The analysis coincides with a separate call for the government to give self-employed people maternity pay (and paternity pay), and universal childcare, to help them “address insecurity.”
Sounded by the RSA, the call came after its researchers found that about 16% of the UK workforce is now best described as ‘The Acutely Precarious’ and of this group -- who struggle to make ends meet but often work flexibly, about a third are self-employed.
It is this sub-group that the declining number of self-employed bankrupts are likely to be former members of, as opposed to other freelance groups identified in the RSA report, such as ‘The Strivers’ and ‘The High Achievers.’
However regardless of categorisation or sector, the advice for any freelance sole trader or self-employed person who finds themselves in debt and struggling, financially, is the same.
“Seek help and advice from a qualified and regulated source,” says R3’s Duncan Swift. “Government plans to introduce a short ‘breathing space’ for seriously indebted individuals are welcome, but it will take several years to actually implement.”