Income Protection 

Self-employed clients are under-protected

Self-employed clients are under-protected

More than half of advisers fear self-employed clients are under-protected, research from MetLife has revealed.

The research, conducted among 200 advisers in September 2018, showed 56 per cent of advisers believe self-employed clients do not have enough protection to provide financial support if they are unable to work, while 34 per cent of advisers believe they do have sufficient protection.

The provider's study revealed the average adviser now has more than one in five (21 per cent) self-employed clients, with 57 per cent stating self-employed clients are a potential major growth area.

This mirrors the growing trend for self-employment across the UK, with Office for National Statistics (ONS) December 2018 labour market figures showing 4.77 million people are currently self-employed, equivalent to around 14.7 per cent of the total workforce. 

More than two out of five (43 per cent) of advisers said they struggle to convince self-employed clients to increase their protection, with affordability seen as the biggest barrier.

Around 39 per cent of advisers stated self-employed clients worry about the cost.

Roughly a third believe clients do not prioritise individual protection, while 12 per cent of advisers said policies are inflexible. 

Richard Horner, head of individual protection at MetLife UK, said: "Self-employed workers are particularly vulnerable if they or one of their family suffers an injury or accident which makes it difficult to work and earn money. 

"Everyday risks such as children getting injured or becoming ill are a bigger risk for the self-employed if they have to take time off work to look after them and the same applies if they themselves suffer injuries, as they do not have the same rights to statutory sick pay.

"Individual protection products have a major role to play in supporting the self-employed."

Martin Bamford, chartered financial planner at Informed Choice, said it is important for advisers to raise awareness of this area.

He said: "We are seeing a growing number of our clients going self-employed, especially in retirement, so income protection has to be part of the advice.

"Cost is certainly a concern, particularly if the client is starting their own business and they want to put most of their funds into their new venture. However, as state benefits aren't very generous, it is important clients protect themselves."

Dippy Singh is a freelance journalist