Self-employed racking up most problem debt
30 April, 2013
The self-employed are amassing an alarming amount of problem debt according to new figures from StepChange Debt Charity. 16,118 self-employed people sought the charity’s help with their debts last year and owed an average of £27,739. This was £10,000 more than the overall average debt of £17,635 for those seeking help from the charity in 2012.
Higher debt levels than other groups
Comparing it to the employment status of the other client groups highlights the scale of the debt that the self-employed are accruing. Those seeking help from the charity last year who were in full-time employment owed £8,000 less, with an average of £19,445. Those in part-time employment owed even less, with an average of £14,582. Retirees owed an average of £17,839, full time carers £13,658 and the unemployed £11,888.
Reason for higher debt levels
Self-employed clients report using credit to fill gaps in their income as well as using credit to prop up their businesses. This is likely to be why self-employed clients who have a failed business owe on average of £45,292.
Delroy Corinaldi, external affairs director of StepChange Debt Charity, said: “This research shows the harsh economic reality of owning a business. These clients have most likely turned to loans to kick-start their enterprise but with lower than average incomes and high expenditure this can lead to spiralling debt problems.
“The pressure of trying to maintain a business and coping with debt can be extremely stressful, we would urge anyone in this situation to seek help and advice from StepChange Debt Charity”.