Research from the Association of Independent Professionals and the Self-Employed (IPSE) and specialist mortgage provider CMME has revealed that those who work for themselves are not accessing the financial products that would help them save for later life or buy a home.
71% of freelancers are worried about saving for later life following Covid-19, with women most likely to be affected. 78% of self-employed women said they are concerned about saving for later life compared to 69% of men.
In addition, women are more likely to not be saving compared to men (20% compared to 12% respectively.)
The new research saw 624 UK freelancer workers asked about their attitudes towards savings and mortgages. It found that despite the record increase in first-time buyers post lockdown, only 1 in 10 self-employed workers (12%) are planning to purchase a property in the next five years.
The research also found that freelancers are skeptical about how they will be handled by mortgage lenders. While 9% believe that they will be treated fairly by lenders, 50% believe that they won’t be. Furthermore, 38% of freelancers that have obtained a mortgage in 2021 found the process of getting one either somewhat or very difficult. This represents a 57% increase since 2020.
While government schemes like the Self-Employment Income Scheme (SEISS) provided some freelancers with a lifeline during lockdown, the research says are signs that accessing the support could have a serious negative long-term impact on the financial wellbeing of the self-employed sector. According to the research, 40% of people who accessed the Self-Employment Income Scheme (SEISS) during Covid-19 fear that they could be penalised in a mortgage application.
Andy Chamberlain, director of policy at IPSE, said: “Today findings are a wake-up call for lenders and the government. While the focus in recent months has been on economic challenges like supply chains and rising inflation, more attention needs to be given to self-employed workers, who have taken the brunt of the pandemic.
“The government needs to work alongside the financial sector to alleviate the barriers preventing more freelancers from accessing financial products. Around one in seven working people in the UK are self-employed. Not only do we have a responsibility to ensure they have the same ability to save and buy a home as everyone else, lenders should recognise the self-employed make up a huge and potentially lucrative market.”
Mike Coshott, CEO at CMME, added: “As we come out of the pandemic, it is clear that self-employed workers need more financial support. The past year and a half has derailed freelance work, with many self-employed people seeking help from SEISS and other financial schemes. While many have been able to generate regular work and income post lockdown, today finding’s around savings show that freelancers still bear financial scars from the pandemic.”