Self-employed workers are mostly financially secure and happy in the present, but concerned about the future, according to a new report.
The report, ‘The Path to Prosperity’, by IPSE (the Association of Independent Professionals and the Self-Employed) and insurance provider Sherpa shows that, although almost three quarters (72%) of freelancers are currently enjoying life because of how they are managing their money, 77 per cent are concerned the money they have – or are going to save – will not last.
It also found that over half (51%) of the self-employed have felt anxious or stressed about their financial situation. This is exacerbated by the lack of tailored money management advice and flexible savings products available for the self-employed, says the report.
According to the research, short-termism is particularly predominant among Millennials, who are more likely to focus on the financial near future. Generation X and Baby Boomers, on the other hand, are far more likely to prioritise saving for retirement.
The report identifies the factors that most define financial wellbeing for the self-employed. They include: the freedom to make choices and enjoy life, earning enough to provide for family and loved ones and being able to put money away for retirement.
It recommends networking to build a more regular stream of clients, creating budgets and getting necessary insurance and upskilling to maximise earning potential. It says volatile government taxation and regulation, a lack of self-employed-specific advice and financial products that do not offer flexibility are barriers to effectively managing finances. It would like to see financial policies and services made available which understand the challenges of self-employment and offer adaptable solutions.