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Self-employed numbers rise, but charity raises concerns

6 February, 2013

Following new figures released today (February 6) by the Office for National Statistics (ONS) showing that more people are becoming self-employed, StepChange Debt Charity has raised concerns about debt problems among this group.

According to the charity’s findings the self-employed are likely to be more dependent on credit and have significantly higher debt levels than those in full or part-time work.

In a recent report, commissioned from the Centre for economic and business research, StepChange Debt Charity found that its average self-employed client debt level was 18.6 times annual income, this contrasted with those in full or part-time work who had a debt level of 4.1 times annual income.

Self-employed people coming to the charity both earned less and had higher expenditure each month than those in full or part-time work. The average self-employed client earned £1,321 (net) per month, but spent £1,532, leaving an average monthly budget deficit of £211. This compares to the average person in full or part-time employment who had an average income of £1,542 and a monthly surplus of £74.

Previous research by StepChange Debt Charity, commissioned from the Personal Finance Research Centre at the University of Bristol, found that often credit is used to set up a small business or franchise, triggered by a desire to boost household income or in response to redundancy.

Delroy Corinaldi, external affairs director of StepChange Debt Charity, said: “The rise in self-employment reported by the ONS since 2008 may not necessarily be through choice, but a reflection of the changing employment circumstances that many people face.

“Self-employed people’s business and personal finances are often closely intertwined and as they use credit to invest in and support their enterprise, it can leave them particularly vulnerable to problem debt.

“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 from an organisation like StepChange Debt Charity”. 

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Tel: 0207 391 4583

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Email: press@stepchange.org

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