If you’re self-employed, or thinking about going down that road, the Money Advice Service recommend that you consider your personal insurance options. This is because when you’re self-employed you don’t have an employer to rely on for sick pay - so you need to think about what will happen if you can’t work because of illness or injury.

Many self-employed people take out income protection insurance or critical illness cover in case they get too sick, or injured to work, or get a serious illness. Life insurance is also common for those who have dependents. However, according to new research from Scottish Widows, there are self-employed workers who not only forego insurance, but they have no other means to get by should the worst happen. Almost half of the self-employed surveyed had no other contingency plan in place, such as back-up savings, should they fall ill, despite working-age benefits like Statutory Sick Pay (SSP) not being available to the self-employed.

There are currently a record number of self-employed workers in the UK - 4.86 million people (15% of the total working population) and according to Scottish Widows taking extended sick leave could cost the self-employed an average of £67,550 each year. That’s a significant financial cost to an individual if you haven’t got the right protection insurance in place. In fact, the average self-employed person admits their savings would be exhausted after just nine months if they were unable to work. These statistics seem even more worrying when you consider that a third have dependent children and nearly half (48%) say their household relies on their income alone.

Plus, the majority (62%) of self-employed workers say they have no other source of income outside of their business, and a third (34%) admit that if they were unable to work due to illness, they would have no other resources or income to rely on.

It takes time and money getting a business off the ground and it seems some self-employed workers are not protecting their greatest asset – themselves.

Jackie Leiper, protection director at Scottish Widows, comments; “This is particularly concerning when you consider that this workforce has a more limited range of working-age welfare benefits. Self-employment and self-reliance go hand in hand, so it’s absolutely vital that these workers have a back-up plan in place should the unexpected happen, especially with so many of their families being solely reliant on their income. No one wants to think about the unexpected happening, but having a financial back-up plan will provide peace of mind and allow people to enjoy the many benefits that self-employment brings.”

If you are self-employed or thinking about becoming so, there are several different policy options available to suit a variety of budgets. It’s also possible to tailor cover to protect specific debts or select a more specific term for a policy. To help make it easier for you to decide which policy is best for your needs, we can help. If you’d like to find out more, give us a call on 0800 612 8005 and we’ll talk you through your options. Ultimately, taking out insurance for your most valuable asset is a small price to pay for peace of mind knowing you’ll be financially resilient, should the worst happen.