Self-employed incomes are ‘falling like a stone’ as a result of Covid-19

The incomes of self-employed people are ‘falling like a stone’ amidst economic disruption caused by Covid-19, according to charity the Money Advice Trust, which runs the Business Debtline advice service. The warning comes after the Chancellor Rishi Sunak told MPs that constructing a scheme to protect the self-employed who are losing work because of the Coronavirus crisis “is proving to be problematic”.

The charity says that the likely implementation delay in any support scheme that the Government brings forward, such as through the model being advocated by IPSE and others to replace 80% of average incomes over the previous three years, means interim measures to provide self-employed people experiencing hardship are now even more urgent.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Many self-employed people are seeing their businesses hit harder and more quickly than they could ever have imagined, as the country grapples with the Covid-19 crisis. Almost every call currently being made to Business Debtline is about the impact of the outbreak on self-employed people’s finances – many of whose incomes are falling like a stone.

“This group is currently the least likely to benefit from the government’s financial response to the Covid-19 outbreak so far. The Chancellor has already announced big and bold support for people in employment – there is now an urgent need to do the same for the UK’s self-employed workers.

“The Chancellor’s comments to MPs today warning that any new scheme will not be able to provide immediate support makes it even more important that the Government introduces a dedicated hardship fund for self-employed people, to help them cope with the difficult weeks and months ahead.”

The Money Advice Trust is continuing to engage the Government on the need to support household and small business finances through the Coronavirus crisis, following the publication of the Money Advice Trust and StepChange Debt Charity’s proposed ‘Rescue Package’ recommendations last week.