KEY SELF-EMPLOYMENT FACTS AND FIGURES
- 5 million people in the UK are self-employed
- 1.5 million of those are part-time
- Median full time self-employed income is £347 a week (median weekly for employed workers is £585)*
- Half of all self-employed are in London, South East and South West
- More women are self-employed than a decade ago: 1.54 million
- One fifth of self-employed people are in construction
- About 69% of self-employed people do not currently save into a pension
- Number of 16 to 24-year olds in self-employment has risen by 26 per cent in the last decade; the number aged 65 plus who count themselves as self-employed has almost doubled.
- 8.2 per cent of the workforce aged 16 to 64 have never had a paid job - 3.4 million people - a 52 per cent increase since 1998
- £94 a week gives annual earnings of £4,888; compared with £287 a week on the National Living Wage, or £14,942 a year
The Chancellor last week announced an unprecedented package of measures designed to prevent job losses and loss of earnings as a result of the coronavirus crisis.
For self-employed workers, Mr Sunak announced that he would suspend the minimum income floor, which enables workers to access full Universal Credit at a rate equivalent to Statutory Sick Pay and allow self-employed workers to defer their next self-assessment tax payments until January 2021.
However there remains a greater degree of uncertainty for the self-employed, who face navigating the benefits system to determine how much they will be ‘paid’, following the proposals.
Because of the way Universal Credit (UC) works, Royal London, the mutual insurer, warns that this amount could vary significantly depending on individual circumstances, such as postcode and whether or not the self-employed person has children.
A self-employed person who also runs a limited company could be eligible for business interruption loans or grants for the Government, which could help to boost their cash flow, whereas a self-employed person who is a sole trader would not be entitled to this additional support. Small businesses may also benefit from the deferral of VAT payments.
Following the measures, a self-employed person earning the median self-employed weekly amount of £347 a week would see a reduction of 73 per cent to £94 a week if they were paid only the SSP amount.
Becky O’Connor, personal finance specialist, said: “The Chancellor alleviated much uncertainty for employees. However for the self-employed, there remains a cloud of uncertainty hanging over them.
“They are especially vulnerable in the immediate term, even after the announcement of this unprecedented package of measures."
Guidance to the self-employed facing uncertainty
“Self-employed people need to prepare their finances: draw on any immediate savings as required, cut any unnecessary spending and research whether they are entitled to any benefits. Get whatever help is available, either from the Government or banks. If they have a limited company, they may be eligible for some of the business support announced.
“Speak openly with clients – is work still on the horizon or is it likely to be cancelled? Are there are other ways you can make money while your usual work is on hold?
“Some creative thinking, as well as careful and realistic planning and a thorough investigation of options with lenders and clients will help keep finances afloat.”
Proposals to support self-employed announced last Friday March 20th:
- Suspension of minimum income floor to access in full Universal Credit at a rate equivalent to SSP (£94 a week)
- Next self-assessment tax payments deferred to January 2021
Notes to Editors
- ONS https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07
For further information please contact:
Becky O’Connor, Personal Finance Specialist
- Email: Rebecca.O'Connor@royallondon.com
- Tel: 0203 2725 434
- Mob: 07967 613925
About Royal London
Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £130 billion, 8.8 million policies in force and 4,046 employees. Figures quoted are as at June 2019.
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