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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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.