Published: 5 September 2019
The biggest increase has come in older age groups. Almost half of the UK’s self-employed population is now accounted for by the over-50s, according to jobs and volunteering service Rest Less1.
Of the 4.85 million self-employed people that make up almost 15% of the UK labour force2, 2.27 million are over 50, up from 1.45 million a decade ago. Rest Less also found that just short of a fifth of those are over 60, a rise of almost two thirds since 2009.
Advances in communications technology have allowed a growing number of jobs to be carried out remotely, making it easier to exchange company employment for going it alone.
For some people it’s likely to be a lifestyle choice. The freedom, flexibility and autonomy that self-employment can offer will be a big appeal for many. There’s also the potential in some industries to increase earnings by striking out on your own.
For others a move to self-employment may be borne more of necessity, perhaps driven by factors such as redundancy and the financial challenge posed by increasing life expectancy.
For those in their 50s and 60s, another factor may be the changing shape of retirement.
Research published earlier this year by the Institute for Fiscal Studies found a marked increase in the employment rate of 60-year olds from 45% to 58% since 2009. While much of this is a direct result of increases in the state pension age, there are other reasons too3.
Alongside increasing life expectancy, the pension freedoms that took effect in 2015, creating greater flexibility around retirement investing, have made it easier for people to extend their working lives in order to bolster their pension savings.
There’s no reason to suggest that the trend is likely to reverse any time soon. But becoming self-employed is clearly not a step to take lightly, especially if you’re currently an employee. It’s not a lifestyle choice that suits everyone, while the financial aspects can hold some challenges.
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1 Workplaceinsight.net – Half of self-employed workforce now over 50 – 29 July 2019.
2 ONS – UK labour market: January 2019 – 22 Jan 2019 – see fig.4.
3 Institute for Fiscal Studies – Retiring at 65 no more? The increase in the state pension age to 66 for men and women – 5 March 2019.
4 FT – The self-employed pensions time-bomb – 18 Dec 2019.
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