A recent survey looking into the make-up of the UK workforce and how it has changed has found a shift in the number of those who class themselves as self-employed.

In the past two years, the number of self-employed workers has dropped by nearly 700,000 people. In 2019, a peak of 5 million was recorded, now 4.3 million is the figure collected for this year, according to analysis by Rest Less.

But why might this be? There are many reasons why working for yourself is an attractive option, suiting many lifestyles. However, the past few years saw massive changes to circumstances, meaning many have returned to the more traditional model of being employed by someone else.

 

Looking a little bit more in depth at the figures shows us that all age groups experienced this drop off in numbers when it comes to self-employed workers, apart from those in their 70s and 80s. Also, the data reveals there are more self-employed people in the 50 to 59 age group than any other. 

Keep reading to find out why many or making the switch, and why it might be a better choice in the long run!

 

Pandemic uncertainty

If nothing else, the previous two years proved to all of us that we can never predict what’s coming next! With many businesses stopped in their tracks through years of lockdown measures, income stopped too. Through this, those who were employed by companies had furlough money to fall back on but the self-employed grants from the government came in three-monthly chunks. For those who worked for themselves, the uncertainty during this time was enough to send them back into the traditional model of the workplace. 

 

Changes to IR35

In April 2021, the hotly contested, and many times delayed, IR35 changes finally came into force. It changed the way self-employed people charged companies they were contracted to work with, meaning many had to fork out more in income tax they weren’t paying previously.

 

Setting up for the future

While we’re all set to get our state pension from the government when the time comes, and there are self-employed people who set aside some of their hard earned wages each month as a nest egg for the future, having it all sorted by a recognised pension provider is often a lot easier! It’s the law for your employer to offer to put you on a pension scheme to help you set yourself up for the future, so this can be a big draw for those who want a cushy retirement. 

 

Holiday pay and other benefits

For those who work for themselves, if you’re not at work, you’re not getting paid. This can be particularly tricky to navigate now that the world is opening up again and we all want to get away on holiday! Similarly, when you’re off work sick, you won’t be getting paid! Employers not only have to, by law, offer paid time off for holidays, but may offer other benefits like bank holidays off, sick pay and even a bonus holiday on your birthday.

 

The social aspect

For the past two years, we’ve been locked away in our houses, in some cases, with only our pets for company! Now, the workplace has changed, and with many of us working from home, striking some balance between home office and actual office, we may all be a bit lonelier than we were a couple of years ago! Being employed by someone else often lends itself to larger teams and more interactions with others. Who knows? You may even meet your next work bestie!

 

Room for growth

While company hierarchies are seen as bad things by some, they actually afford a level of growth for those not yet at the top of the ladder. Working with others who are more knowledgeable and have a greater level of experience can really help you progress in your field and, in the long run, make you better at your job. What’s not to like?

 

Stuart Lewis, founder of Rest Less who conducted the study into the UK workforce, said: “The self-employed workforce has gone through a tumultuous couple of years as they first faced the full force of the pandemic shutdown with business drying up overnight for many, as well as sweeping legislation changes around IR35 in April, which brought an end to many previous self-employed contractors providing their services through personal services companies.

“Whilst the number of self-employed workers overall has shrunk by 14% in two years, self-employment remains an attractive option for many workers in their 50s, 60s and beyond, with workers over 50 making up nearly half of the entire self-employed population.”

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