More young people are saying they’d like to become self employed in the future. What is it really like? Youth Ambassador Harvey Morton spills the beans – because self employment can be great but it’s not the quick money fix you might think it is.
According to research from the Office of National Statistics (ONS), the number of young people choosing self-employment has increased, with 22% of 16- to 21-year-olds stating that they are likely to become self-employed at some point in the future, and 9% of 22 to 30-year-olds are self-employed after leaving education. The unemployment rate in the UK fell to 4.2% in the three months to May 2018, the joint lowest since 1975. The rise in self-employment helped boost jobs growth overall following the recession, according to the ONS.
The research shows that Students and school-leavers see self-employment as a route to a high income and family time. The report shows that those who are seeking self-employment in the future rate family time and high income as motivating factors, as opposed to those who aren’t seeking self-employment who rate an interesting job and job security as the motivating factors for their future career. Could the views of those seeking self-employment be distorted?
What does self-employed mean?
Self-employment is not just entrepreneurs – it includes freelancers and contractors too. Self-employed workers are not paid through PAYE, and they do not have the same employment rights and responsibilities of employees.
Zero-hour contract workers do not count as self-employed, as they are employees without a guaranteed number of hours.
Expectations vs Reality
In 2018, there were more than 500,000 self-employed 22 to 30-year-olds across the UK.
While many 16 to 21-year-olds associate self-employment with a high income and shorter working hours, the reality is that self-employed workers earn on average £3,800 less per year than their employed counterparts, despite many of them working longer hours.
Men are more likely than women to be self-employed, with males between the ages of 22 to 30 being twice as likely as women to work for themselves. However, this gap is closing, with the number of self-employed women increasing at more than twice the rate of men since 2008.
While many people express a desire to become self employed because they think it’s a quick fix to earning more money, the truth is quite different. Not only do young people who are self-employed earn less on average, they also fail to receive the benefits that those who are employed do – including pension. Plus, the high degree of financial uncertainty associated with self-employment can also mean it’s harder to get a mortgage. Afterall, self-employed workers running their own business take responsibility for its successes and its failures.
While self-employment may be a great choice for some, it’s crucial anyone wanting to go down this path does their research and reaches out for support before they start out, whether that is from family and friends, or from a professional.
Read the full report from the ONS here.
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