The UK’s self-employed workers appear undaunted by the potential impact of Brexit on their businesses, according to new research from Kensington Mortgages. Strikingly, the clear majority (63%) saw exiting the EU as having no direct impact on their business, over three times as many (20%) as those who viewed it in negative terms.
Kensington Mortgages surveyed over 1,000 self-employed workers across the UK to analyse their thoughts and concerns for the year ahead, with the formal deadline for Brexit now less than a year away. Of those surveyed, nearly half of self-employed workers (47%) expected 2018 to bring in more work than last year. When asked whether their business would be more profitable, 42% were confident that they would make more money in 2018 than 2017, compared to just 21% who weren’t confident.
Interestingly, younger generations were the most confident when it comes to forecasting the state of their own finances for the year ahead, with 65% of 25-34-year olds and 78% of 16-24-year olds optimistic about their chances of making more money in 2018.
As well as holding positive financial outlooks, self-employed workers are careful with their savings. If new work suddenly stopped coming in, 42% said they would be able to sustain themselves for a period of six months or more. Even in the smallest businesses of just 10 people or less, 24% felt they could last for a period of nine months or longer. These findings are significantly higher than the average UK employee, who only has enough savings to last them just 32 days on their current lifestyle if their income stopped, according to research by Legal & General’s ‘Deadline to Breadline.’*
However, when asked how Brexit might affect the ability of self-employed workers to take out loans, for example a mortgage, 35% felt Brexit would make it harder, with freelancers (37%) and sole traders (33%) expected to find it the most difficult.
Craig McKinlay, Sales & Marketing Director at Kensington Mortgages, comments on these findings:
“Self-employed workers are, without a doubt, the backbone of the UK economy, so we should all take reassurance from their optimistic outlook and ability to build up their savings to cope with life’s unexpected events.
“While this is undoubtedly good news, we shouldn’t lose sight of the struggle these independent workers face when it comes to getting a mortgage. Of those surveyed, 27% had a residential mortgage. Self-employed workers often have unique concerns and needs, which can make it difficult for them to secure the right financial solution.”
Despite the optimistic attitude towards Brexit’s impact on personal finances, leaving the EU and its impact on the UK economy still remains a divisive issue. The majority (52%) felt pessimistic about the effect Brexit might have on the economy and expect a negative impact to result.
Geographically as well, the political fault lines of the European Union Referendum in 2016 appear to retain their potency two years on. Mirroring the Brexit vote itself, the majority of self-employed workers in Scotland (67%), London (60%) and Northern Ireland (58%) believe Brexit will have a distinctly negative impact on the economy.
Craig McKinlay, Sales & Marketing Director at Kensington Mortgages, continues:
“The fact that such a diverse group of workers would have diverging views on Brexit is unsurprising. What is perhaps more important is how we respond to these concerns. Regardless of regional location, business size or age, the self-employed have unique day-to-day circumstances that unite them.
“Providing this group with access to the right financing needs to be a priority for the entire industry, as we can’t afford for such a valuable contributor to the UK economy to be underrepresented. Fortunately, there are lenders out there who appreciate the contributions these workers make to our economy and who want to support them in their ambitions and goals onto the housing ladder in return.”
*Legal & General ‘Deadline to Breadline’ campaign, 2017
For the full report, click here.
See infographic here