At Fair Business Loans we were interested to hear that the RSA has recently launched a Charter for the Self-employed. The RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) aims to enrich society through ideas and action.
Over the past two years it has conducted research over into the life of the self-employed. As 1 in 7 of the workforce are now self-employed the RSA seeks to better understand the needs of this emerging community, and wherever possible they seek to improve the livelihoods of people working for themselves.
The Self-employment Charter outlines eight practical points, which we quote verbatim as follows:
- Establish automated saving schemes for the self-employed on low incomes
To improve saving rates, banks should create a ‘Save When Paid’ initiative for their self-employed clients, which would allow them to channel a percentage of every invoice into a savings account.
- Establish a ‘Right to Request’ for more flexible terms on mortgage payments and rental costs
To manage income volatility, the government should establish a ‘right to request’ in the housing market so that self-employed workers (and employees) can ask for more flexible terms on their payment schedule, for example by switching to an interest-only mortgage for a short-period.
- Present a ‘compulsory question’ for enrolment onto a pension or ISA scheme
To improve readiness for retirement, the government should present the self-employed with a ‘compulsory question’ asking them whether they wish to join a workplace pension scheme and/or a government-backed ISA.
- Redesign Universal Credit so that it reflects the reality of self-employed work
To help the low-income self-employed sustain and grow their business, the government should make several adjustments to Universal Credit, for example extending the ‘Start-Up Period’ (where claimants are treated more generously) from 12 to 24 months.
- Explore the potential for creating a social enterprise with a ‘cash-pooling’ service
To alleviate the problem of late payments, the government should work with business groups to develop a new social enterprise that pools the finances of small business owners, allowing them to dip into a collective pot of money as they await payments.
- Fully open up the new Fit for Work service to the self-employed
To improve occupational health, the government should allow the self-employed to access the face-to-face assessment component of the new Fit for Work service, which supports people to return to work after an illness.
- Address the design flaws in the New Enterprise Allowance
To help more low-income groups into self-employment, the government should make several adjustments to the way New Enterprise Allowance is delivered, for example by reducing the value of the payment gradually rather than abruptly, and ensuring every Job Centre Plus has a named self-employment adviser.
- Introduce equal treatment under the Work Programme
To help more low-income groups into self-employment, the government should mandate that every Work Programme provider offer specific support to people who want to move into self-employment, and consider whether Work Programme participants be allowed access to the New Enterprise Allowance stipend.
As you can see, most of these measures are directed at the government, and also financial institutions, mortgage providers and public bodies. The RSA is urging these groups to invest in the wealth creators of the future and take action to help more people engage in meaningful self-employment.
The RSA believes that, by so doing, they will unleash the potential for greater productivity, greater job creation, greater numbers of people able to work for themselves, and greater numbers of people able to lead fulfilling lives.
The RSA also hopes that the Charter will provide an equal opportunity for everyone to success in business should they want to do so. Their research found that people who already have some capital behind them, own their own home, and have an established network of contacts are more likely to success in business.
They have produced a short video called Does it Take Money to Make Money as part of this campaign. Their passion is to see everyone having the chance to author their own lives.
At Fair Business Loans we share this passion and are privileged to have been able to help many small businesses develop and grow by means of a small business loan and business help and advice. Have a look at some of our Case Studies to get an idea of the range of businesses and owners that we have supported.
If you think we might be able to help you with any aspect of small business funding then do get in touch with us and we’ll see what we can do!