Survey puts spotlight on income loss fears

Almost 50% of self-employed workers would see their business close within a year if they were unable to work due to illness or injury, a new survey estimates.

Research by Royal London on self-employed financial brokers throughout the country showed that of those that did not have income protection cover in place, almost half would expect their firm to cease trading while 48% also indicated that turnover would be cut in half.

According to Royal London’s analysts, the situation would likely be replicated across other sectors.

“Whether you are self-employed or working in a company, most of us probably haven’t thought about what would happen to our income if we were unable to work for an extended period of time,” said Royal London marketing manager Joe Charles.

More than 40% of respondents indicated that income would fall within the first month of their absence from the business, while just 3% said they would anticipate their income to remain strong for over six months.

A quarter of respondents said their income would be entirely wiped out after three months. Three in 10 said they would see income fall by between 50% and 75%.

“It is clear from the responses that most people’s income would suffer swiftly and significantly if they were out of work and didn’t have Income Protection cover in place,” said Mr Charles. “And what is also evident is the fact that this missed income has the potential to leave people in dire financial straits as they would quite obviously struggle to meet significant monthly commitments on their normal household expenditures and mortgage payments.”