As self-employment becomes an ever more significant aspect of the UK economy, how can the lack of sick pay and peer support be tackled? A self-organised solution called “Bread Funds” has sprung up in Holland, and groups are now starting in the UK and looking for people to take part in a pilot.
In 2004, when the Dutch government abolished sick pay for self-employed people, several members of a co-operative network decided to set up their own provision for self-employed people in their network. The government had recommended they take out income protection insurance to cover them if they became ill, but some were quoted premiums of more than 600 Euros per month, so they created a peer-to-peer alternative to insurance, which they called Broodfonds (Bread Fund).
Members of this “Bread Fund” put aside money each month, and if any member became unable to work for an extended period through illness or injury, they received a monthly income made up of small gifts from each of the members until they could get back to work. This worked well, and after a few years they decided to set up a co-operative, De BroodfondsMakers (The Bread Fund Makers) to enable other groups of self-employed people to do the same.
There are now over 250 Bread Fund groups with over 11,000 members, who support each other if unable to work because of illness or injury. Unlike insurance, where support is purely financial, Bread Fund members often receive moral and practical support as well as money to live on when they cannot work.
An example of how it works was featured in The Guardian a few years ago. Jackie Smeets had a stroke just 3 days after joining a Bread Fund, but received both financial and moral support from the other members as she recovered and got back to work.
Could something like Bread Funds work in the UK too? British self-employed people have never been eligible for sick pay. When sick pay was established by the National Insurance Act 1911, politicians thought of the self-employed as well-off middle-class people who did not need sick pay. With average earnings from self-employment now lower than average earnings of employees, these Edwardian ideas are now well out of date.
Matthew Taylor’s review into modern employment practices is re-examining self-employment and its associated rights and responsibilities in the light of the emergence of the “gig economy” and the spread of “flex-work”. But the issue is much wider than work carried out via online platforms; it also affects traditional self-employed trades, such as the carpenter portrayed in Ken Loach’s film “I, Daniel Blake”, whose struggle to obtain benefits when unable to work because of a heart condition outlines the absurdness of the current benefits system. There are plenty of real examples of self-employed people turning to food banks when unable to work because of illness or injury.
Is insurance the answer? Income protection insurance is available for self-employed people in the UK at much lower premiums than in the Netherlands, yet only 9% of UK self-employed people take it up (compared to around 22% of Dutch self-employed sole traders). Insurance tends to come with exclusions, e.g. for prior conditions or jobs considered risky, and premiums rise substantially with age. A Bread Fund, on the other hand, is quite different from insurance: it is about people supporting each other financially and interpersonally, so there is no external institution to impose exclusions. Members who are unable to work also benefit from the kind of moral and practical support that no insurance company can offer.
Following a successful feasibility study funded by Esmée Fairbairn Foundation, Bread Funds UK are now looking to set up pilot groups to test the concept in the UK. We would like to invite Fellows who have been self-employed or freelance for more than a year to join a pilot group. As a pilot group member, you need to be willing to experiment, accepting that the initially agreed terms and conditions may later be changed if the members agree. But you are also a pioneer, helping build a new model for mutual support for freelancers at a time of uncertainty.
If you are interested, please contact Stuart Field at email@example.com