Dire warnings for sole traders as super contributions are sacrificed to meet everyday costs

Sole traders have been warned that they are sacrificing their futures as almost a quarter report they plan on cancelling or delaying their super contributions due to rising costs.

The findings come from the latest Hnry Sole Trader Pulse which suggests the figures are even worse for women.

The nationwide survey of self-employed people in Australia revealed that 31 per cent of women are considering cutting their super to make ends meet compared to 20 per cent of men. Even more alarming, since superannuation is not compulsory for the nation’s sole traders, over four in ten (43 per cent) admit they have never made a contribution.

Karan Anand, Hnry Australia Managing Director said it was unsurprising that the nation’s sole traders were neglecting their super given mounting economic pressures.

“With increasing inflationary and interest rate pressure, uncertainty in the economic outlook and financial admin taking them out of action for a full day every week or forcing them to find these hours last at night, it is no surprise that almost half of the self-employed – and vastly more women than men – are not contributing to their super.

“These pressures are compounded by the data that shows that just three weeks out from the tax filing deadline, only 50 per cent have completed their tax returns, Anand said.

The survey revealed sole traders are also battling increased working hours and lower rates as they attempt to cope with inflation and a competitive market. This results in less of the work-life balance that encouraged many to initially become self-employed.

The impact is being felt in a decline in their mental health and wellbeing.

Hnry reports fewer individuals to believe they have the right work-life balance than 12 months ago when the survey began. According to one respondent, a sole trader in the health sector: “Mental health is a booming industry, unfortunately”.

In fact, sole traders are more pessimistic about the medium-term outlook for the economy than they were during the depths of lockdown. Despite the fact that quarterly income is improving, economic conditions are biting.

“We also know that, overwhelmingly, sole traders consciously choose working for themselves because of the myriad positive benefits it brings: lifestyle, flexible working conditions, a chance to pursue their passion and choose their own future.

“Most Australians are facing tougher economic times at the moment and we really admire how the self-employed are pushing through. We are here to support them,” Anand said.

The Hnry Sole Trader Pulse is Australia’s only regular, comprehensive snapshot of self-employed people in Australia.

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