The report found that self-employed individuals have debts which total 18.6 times their annual income. In comparison, people in full or part time employment have debts which total 4.1 times their annual income.
Most of the debts in question were mortgages, with the average self-employed person owing a staggering £206,500 compared to £54,600 owed by people in employment. The report also explained that self-employed workers earn 14% less on average.
The report also showed that on average, a self-employed person had £42,500 outstanding on non-mortgage related debts, compared to £24,200 for those in employment.
Beverley Budsworth, Managing Director of The Debt Advisor said:
“These statistics confirm what we are seeing - increasing levels of small businesses struggling following years of recession and flat growth. It’s also hard to separate the finances of the business and the individuals but fortunately there is help at hand. IVA’s for traders can deal with all types of debt including self assessment tax, VAT, rates, suppliers plus personal debts including credit cards and loans”.
