Self-employed more at risk of financial troubles

Freelancers and self-employed are at greater risk of poverty and social exclusion, according to the European Statistical Office (Eurostat) data about 2021. Nearly a quarter of self-employed Europeans are in the risk category, with an increase of their share 1 percentage point compared to the previous year. This was the only category, classified by employment status, that saw year-by-year deterioration. 

Banks in Bulgaria take into account the increasing risk for the self-employed through the interest rates on the loans. According to Bulgarian National Bank (BNB) data loans for employers and self-employed were granted at an average rate of 3.21% in August, an increase of 0.18 percentage point in just a month. Interest rate is much lower than rates of consumer loans but higher than housing loans. Compared to them, loans for employers and self-employed have most increased their price on a monthly basis, but an annual change of all three types of loans is similar – about 0.2 percentage point drop. 

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According to Eurostat data all, except self-employed, saw an improvement and reduction in the risk of financial problems in the last year. This includes retired, employees and unemployed (see the chart). The worst situation for self-employed people is in Romania, Portugal and Estonia. Romania experienced the highest increase in the risk of poverty for freelancers. The country also has a kind of record – more than 70% of self-employed are in the risky group. 

Bulgaria noted a significant increase, but in general freelancers and self-employed are in a better position, compared to many European countries. Hungary and Ireland reported improvement, which remain among the countries where self-employed are least likely to fall into poverty and social exclusion. 

Almost one-third of all Bulgarians live with such a risk. Women, people above the age of 65, unemployment and households without children are more likely to face difficulties. The situation in Romania is similar to that, but the difference is for the children under the age of 18 – they are more threatened than elderly people.  

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