Mortgages  

‘Self-employed let down by financial services sector’

The UK financial services industry must do more to help contractors and the self-employed, according to Keith Street, head of Kensington Mortgages.

Mr Street said: “Self-employed people account for the fastest-growing part of the UK workforce but are still poorly served by the financial services industry.”

He added that Kensington Mortgages had the underwriting expertise to make individual lending decisions, and called on IFAs to help direct people to the most appropriate mortgage for their circumstances.

Article continues after advert

His comments came as research conducted among 2,073 UK adults by Research Plus on behalf of Kensington Mortgages found that there were rising numbers of self-employed people in Britain.

According to analysis done by the lender based on Office for National Statistics data, approximately 4.6m people are currently self-employed. If the current trend for self-employment continues, Kensington believes this could make up almost a third of the UK’s workforce.

Several lenders such as Leeds, Halifax, Clydesdale and Nationwide Building Societies have already created ranges of offset mortgage products for contractors and freelancers, and annualised contract rate underwriting.

A spokesman for HMRC said it has no way of knowing whether these 40-year projections are accurate.

Sectors with most self-employed workers: past 12 months

 

Top 10 sector/industry with the highest proportion of those who have ever been self-employed for at least 12 months

Proportion

Retail and sales

15%

IT and information services

11%

Property and construction

8%

Hospitality, leisure, tourism and sport

6%

Creative arts and culture

6%

Teaching and education

5%

Engineering and manufacturing

5%

Health and social care

5%

Transport and logistics

4%

Business consulting/management (exc. marketing)

4%

Source: Kensington Mortgages, September 2014

Adviser view

Tony Harris, founder of Surrey-based Contractor Financials, said: “With the upsurge in the number of people turning to freelancing it is increasingly apparent that there is a desperate need for specialist financial products for this community of workers.

“With non-standard earnings and without the safety net of a traditional employee benefits package, freelancers find themselves let down by a financial services industry that is still thinking in terms of a 1950s employment landscape.

“IFAs are challenged daily to find mainstream products that meet the requirements of freelancers. The financial services industry therefore needs to work to fulfil the needs of such workers.”