Research suggesting the self-employed sector’s contribution to the UK economy fell by an estimated £25 billion in 2022 is a “wake-up call” for government to change course on its agenda for the nation’s smallest businesses, according to a trade body for freelancers.
While the solo self-employed population remained stable at 4.1 million, the sector’s economic contribution plunged to a total of £278bn – an 8 per cent contraction compared to 2021, according to figures released by the Association of Independent Professionals and the Self-Employed.
Despite the fall in the sector’s economic contribution, the IPSE’s 2022 Self-Employed Landscape report had positive news for groups under-represented in the workforce. The self-employed disabled population continued its trend of year-on-year growth since 2013, increasing by 42 per cent, whilst the number of working mothers in self-employment has increased by 55 per cent since 2008 – the latter now accounting for 13 per cent of the solo self-employed workforce.
The average age of the UK’s solo self-employed is now 48 – one year older than 2021 – with the over 60 age group growing by 7 per cent in 2022, more than any other age group, to account for a fifth of the total.
Andy Chamberlain, Director of Policy of IPSE, said: “Whilst the self-employed population has been resilient at best – and stagnant at worst – it is very concerning that the sector’s economic contribution has fallen by £25bn, pointing to a less rewarding operating environment for solo business owners.
“This research should act as a wake-up call to government. Policies which are detrimental to the sector, such as the IR35 rules and the VAT threshold acting as a cap on activity, should be reviewed.
“We know that self-employment is an attractive option for key groups, particularly older workers; if government is serious about growing the economy and tempting them out of economic inactivity, it should be doing all it can to make self-employment an attractive and aspirational option.”
Another positive was that many self-employed already have multiple funds built up during periods as employees
This follows an earlier report from pension provider iSIPP which showed that self-employed workers are nearly three times more likely to not be paying into pension funds compared with employees.
Its research found 11 per cent of the UK’s 4.25 million self-employed would increase their contributions if they consolidated funds into one while another 17 per cent say they would make more regular contributions.
Another positive was that many self-employed already have multiple funds built up during periods as employees. One in three have multiple funds while one in 10 say they have three or more pension funds.
The research found self-employed workers find it difficult to contribute to pensions – around two out of three (64%) would support Government action to make it easier to contribute.
Managing Director Hrishi Kulkarni said: “Self-employed workers not contributing to pensions is a major issue and at the same there are more than 4.25 million people who count themselves as self-employed according to Government data and as such there is strong demand for solutions that suit them.”
Searches for ‘hybrid roles’ are at a five-year high, rising by 614 per cent in January, when compared to December searches.
Train strikes, high commuting costs and and increasing living costs generally are helping to underscore the attractions of work-from-home roles, according to researchers from Financial-world, whose analysis of Google Trends indicated the volume of searches for those is around 72,000 per month. There are currently 45,257 work-from-home jobs listed on the Indeed job site.