Self employed less able to repay debts
The debt charity’s specialist Self Employed Centre helped over 10,000 people deal with their debts last year with only 17% being recommended a debt management plan (DMP). This is markedly less than the average of 27% for CCCS clients overall.
Similarly, 48% of people contacting the CCCS Self Employed Centre could only be recommended to increase their income compared to 31% across the charity as a whole. Despite these differences, at 9%, self employed clients have almost the same proportion of bankruptcy recommendations as the average for CCCS clients (9.6%).
CCCS says that 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. This can put pressure on an already difficult personal finance situation.
Geoff Waugh, head of the CCCS Self Employed Centre, commented: “The problem for most self employed people who seek our help with their debts is that they have very low income levels. 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.”