BRITISH TRADESPEOPLE OWED £3.5 BILLION IN LATE PAYMENTS THIS CHRISTMAS
Posted by: electime 12th December 2024
- British tradespeople are facing a late payment crisis this Christmas as research from Ford Pro reveals they’re paid on average 35 days late and are currently owed £3,942 each
- One in five UK tradespeople are relying on payday loans to pay their household bills, and the same amount are worried about supporting their family heading into the Christmas period
- Ford wants to highlight the consequences of late payments on small business owners and their families, shining a light on the issue in a new series of festive content from its Little Debt Collectors
Billions of pounds in late payments are owed to tradespeople across the UK, according to new research from Ford Pro. The vehicle manufacturer’s commercial division conducted the research with both tradespeople and homeowners after the issue of delayed or missing payments was reported as the major issue facing sole traders heading into 2025.
Tradespeople are owed as much as £3.5 billion1 in overdue payments, which equates to an average of £3,942 each, the equivalent of over a month’s salary for a typical UK tradesperson2. Almost two-thirds of tradespeople experience late payments regularly, with an average delay of 35 days, while 71per cent of UK tradespeople have experienced outright payment refusal, likely taking its toll on home and family life.
Behind this figure emerges a worrying trend among homeowners, with 18 per cent admitting to spending money earmarked for tradespeople’s payments on personal luxuries, such as dining out, instead. Meanwhile, 14 per cent of UK homeowners have admitted to forgetting to pay altogether.
The financial strain of late payments means nearly one-quarter of tradespeople (23 per cent) are struggling to cover essential bills each month, and almost one in five (17per cent) are resorting to payday loans to make ends meet.
With the holiday season approaching, one in five (20 per cent) tradespeople expressed concern about their ability to support their families this Christmas, and the same percentage admitted to cancelling holidays in the past due to late or withheld payments.
To tackle the late payment crisis head on Ford, the manufacturer of the Transit Custom3 and best-selling van in the UK for 58 consecutive years4, conducted a social experiment with UK homeowners, with the results highlighting that getting customers to pay quicker could be as simple as raising awareness among homeowners. In fact, two-thirds (67 per cent) of homeowners say they would pay invoices faster if they understood the impact of delayed payments on tradespeople and their families. The experiment found that invoices are paid an average of one day sooner when homeowners are reminded of the financial strain late payments create for tradespeople.
Coinciding with the research, Ford has unveiled a festive content series, fronted by its Little Debt Collectors, an unlikely duo whose mission it is to get UK homeowners to stand-up and take responsibility for their actions and pay tradespeople on time.
Mandy Dean, Director of Commercial Vehicles, Ford UK and Ireland, commented: “As Britain’s leading manufacturer of commercial vehicles we’ve been keeping tradespeople moving for 58 years – they’re the real backbone of Britain, keeping our lights on and our daily lives moving. We believe it’s our responsibility to support them to help their businesses thrive. We know that homeowners and tradespeople are all feeling the pressure so we want bring both parties closer together – from helping tradespeople create more effective invoices, to helping homeowners understand the potential impact of an unpaid invoice, it’s not just a number, it’s a meal on a table or a present under the Christmas tree.”
Emma Grant, Head of Trade Experience at Checkatrade, said: “At Checkatrade, and with our network of 50,000 vetted trade businesses, we know all too well the strain that late payments can put on tradespeople. These small businesses are the backbone of our economy, yet without consistent cash flow they cannot function nor cover essential running costs like materials and wages, and the subsequent need to chase overdue payments strains their customer relationships, damaging their reputation and future job opportunities. While delays may be justifiable in certain cases, they all too often create unnecessary pressure and we’d urge homeowners to prioritise payments to these integral small businesses over the festive season.”
Arlo Masters, Lighting Technician from North London, said: “I’m currently waiting on payments of around £3,500 from various customers – some of it dating back six months. It leaves me in a difficult position – not just for my own business and my own finances but I also have to pay other tradespeople I have brought into a job. I am forced to take on more work just to cover my back, and then struggle to find time to chase up payments. It’s an issue that is unfortunately becoming more and more common across the UK, especially when working with wealthier customers where a few hundred quid doesn’t seem like much to them, but to us sole traders it can make a huge difference.”
