Business development · 26 January 2017

Fewer hours and more money – Is self-employment paying off?

self-employment trade-off
The average self-employed worker works 21 hours a week – ten hours less than the average full-time employee

Dropping the traditional nine to five could result in more money and a better standard of living, as a new study reveals a line of surprising benefits to self-employment.

Bookkeeping software company Intuit Quickbooks surveyed over 5,000 self-employed workers in Britain, finding average earnings of £5,000 more a year than the typical UK salary of £26,500 for regular employment

Survey respondents even managed to achieve higher pay working ten hours less each week than those in full-time employment.

Predictably, higher average pay and fewer working hours had a positive impact on the personal lives of self-employed workers. Two-thirds of respondents said that “life satisfaction” had increased since making the shift to self-employment.

However, it was confirmed in the research that freelancers and the self-employed recognised the inevitable risks that came with the benefits of working for yourself.

Almost six in ten stated that the biggest challenge to self-employment was managing an unpredictable income, while almost half of respondents cited uncertainty over future stability as a major worry.

The research found that it was over-65s that had gained the most from self-employment, with mean annual earnings of between £40,000 and £70,000 more than the average self-employed worker.

Commenting on the research, Dominic Allon, managing director of Intuit Europe, said that people were making the switch to self-employment “in droves.”

Allon pointed out that technological developments had made it easier than ever for somebody to choose self-employment, and said it was a trend that is likely to increase.

The most common reason for becoming self-employed, according to the research, was as a consequence of losing a permanent job, with almost a quarter of respondents admitting it was the driving factor.

Since the financial crash in 2008, self-employment has grown significantly in popularity in the UK. Figures from the Office for National Statistics (ONS) showed that between 2001 and 2015, self-employment increased by 25 per cent.

Between September 2015 and 2016, an additional 213,000 people registered as self-employed, with 15.1 per cent of the British workforce now working for themselves.

“The financial rewards, extra time available and better quality of life are the headline benefits of a career and lifestyle choice that is changing the face of the UK’s workforce,” Allon concluded.

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Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.