Self-employed ‘at worst risk of debt’

People who are self employed are at a greater risk of falling into severe debt, it has been noted.

A study by the Consumer Credit Counsel…

People who are self employed are at a greater risk of falling into severe debt, it has been noted.

A study by the Consumer Credit Counselling Service (CCCS) found it only recommended 17 per cent of self-employed people go on a debt management programme last year, comapred with 27 per cent of all people, yet revealed those who work for themselves are still as likely to become insolvent.

The reason individual voluntary arrangement and bankruptcy levels are as high for this group is the inability of many to sustain a good income, according to CCCS self-employment centre head Geoff Waugh.

He explained: “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.”

One example he gave of people running into problems is the propensity of many consumers losing their jobs to use their redundancy money to fund training as driving instructors, only to find that once qualified, landing a job in this role is difficult.

A close examination of insolvency statistics has indicated a number of trends showing certain groups of people to be at greater or lesser risk of going bust.

Insolvency Service statistics for 2010 revealed the overall number of people suffering such a fate was down, but showed the proportion of women in the figures has risen steadily in recent years.

Back in 2000 only 29 per cent of individual bankruptcy cases concerned women, but by 2009 it had risen to 40 per cent.

By Joe White

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