Self-employment and income protection – what you need to know

According to analysis of Office for National Statistics (ONS) data1, a third of working-age adults now suffer from a long-term illness. The number of adults reporting a long-term condition rose by 1.2 million during the two years of the pandemic.

Long-term ill health can make it very difficult for people to work, with a knock-on impact on their finances. This is particularly true of self-employed people; unable to claim sick pay from an employer or the state, their inability to work could have significant financial repercussions.

Increase your financial resilience

Purchasing an income protection policy could be a cost-effective way of protecting yourself against financial shocks. This type of protection policy is designed to pay out a proportion of your income, tax-free, to help you cover essential costs such as bills, your rent or mortgage, and other living costs. Some insurance providers also include additional benefits in their policies, such as access to specialist clinicians and rehabilitation experts, to help speed up your recovery.

Ask yourself this…

If you’re unsure about whether or not you need income protection insurance, ask yourself this:

– Could I afford to continue paying my essential outgoings if my income stopped?

– Do I have savings to help me out if I was unable to work? If so, how long would these last?

– Could I keep my business afloat if I was too ill to work?

–  Could I still look after my loved ones and dependants if I wasn’t working?

If the answers to any of these questions is ‘no’ you’d likely benefit from income protection. We can help you assess the options available and give you valuable peace of mind.

1Observer, 2022

It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.