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UK Trades Face Growing Debt Woes
11 May
Summary
- Over 53% of tradespeople report increased late payments.
- Average written-off debt for tradespeople is £1,646.
- New government measures aim to tackle late payments.
Tradespeople across the UK are experiencing a notable rise in late payments, with over half reporting an increase compared to the previous year, according to a Direct Line Group survey. This situation is described as "deeply demoralising" as many struggle with customers facing financial hardship due to the rising cost of living.
Sixty-eight percent of tradespeople are actively chasing overdue invoices, with a quarter juggling four or more unpaid at a time. The average amount of debt written off by tradespeople stands at £1,646. Some companies are implementing new policies like hourly payments or upfront fees to mitigate these challenges and maintain cash flow.
Recognising the severity of the issue, the UK government has introduced new measures to combat late payments affecting small businesses. This comes amid concerns that late payments are a primary cause for over 1,000 small business closures each month in the UK.
