Self-employed as likely to have debt problems as unemployed

The unemployment figures, ahead of today’s Budget, are a positive sign but rise in self-employment indicates a potential increase in unstable work says Citizens Advice.  

New figures from Citizens Advice highlight how 33% of self-employed people who came to Citizens Advice for help in the last three months got advice on debt problems, the same proportion as those who are unemployed.

Citizens Advice Chief Executive Gillian Guy said:

“An increase in self-employment gives rise to concern. It is good that unemployment is down, including among young people, but a 3,000 rise in the number of people who are self-employed could indicate more and more people are in unstable work and struggling with their finances.  

“People who are self-employed are just as likely to come to Citizens Advice with a debt problem as those who are unemployed.  

“Often self-employment can be first step getting back into employment as people take up jobs like taxi drivers and cleaners.  As the experience of our clients show, it is not an immediate solution to financial woes.  A higher proportion of people who are self-employed get help from Citizens Advice about mortgage and secure loan debts or bankruptcy compared to those in work or unemployed.

“It is important today’s Budget increases efforts to help young people get into work and alleviates the ongoing pressure on stretched households to make ends meet.”

The latest employment figures also show 600,000 people are working on temporary contracts because they can’t find a job and 1.4 million are in part-time work get a full-time employment.

New Citizens Advice statistics on self-employment (December 2013 to February 2014):

• 33% self-employed people who came to Citizens Advice for help in the last three months got advice on debt problems, the same proportion as those who are unemployed.
• 29% of people in work got help with a debt problem.
• 14% of self-employed people who come to Citizens Advice with a debt issue have problems with mortgage and secured loan arrears.
• More than 1 in 10 self-employed people who got help with debt issues got advice on bankruptcy compared to 7% in work and 5% unemployed.

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.