According to the charity’s findings people who are self-employed are more likely to be dependent on credit and have significantly higher debt levels than their counterparts in full or part-time work.
In a recent report commissioned from the Centre for Economic and Business Research, StepChange found that its average self-employed client debt level was 18.6 times annual income whereas those in full or part-time work had a debt level of 4.1 times annual income.
The research also found that self-employed people coming to the charity earned less and had higher expenditure than those in full or part-time work.
StepChange’s average self-employed client earned £1,321 (net) per month, but spent £1,532, leaving an average monthly budget deficit of £211.
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.”
