Working it out: responses and recommendations to the rise in self-employment

Self-employment in the UK is rising, and it brings challenges as well as opportunities.

The pamphlet looks at the rising trend in self-employment from a variety of perspectives, including tax, regulation and red tape, pensions and mortgages, trade unions and the self-employed, enterprise education, coops, and the legal status of the self-employed. It identifies a range of challenges encountered by the self-employed, and makes recommendations for what needs to be done to address them.

The pamphlet can be read in full here.

Self-employment has grown by 14% over the last five years and 25% over the last ten years. Yet, the number of self-employed saving into private pension schemes has dropped from 23% in 2009/10 to 16% in 2014/15. Fewer self-employed people are able to buy their own homes and many battle daily with the insecurity of the “gig economy”.

However, it is clear this growth in self-employment looks set to continue and could soon eclipse public sector employment as a share of the labour market. In 2011 there were 1.5 milion more people working for public sector than self-employed. A decade later OBR forecast the two figures will match, given falls in public sector employment and sharp increases in self-employment which has grown at a significantly faster rate than private sector employment. Possible explanations include the impact of the last recession when many lost their jobs and became self-employed, the increasing number of people working beyond official retirement dates or while raising children and the impact of new technologies.

But these new figures highlight a number of increasingly important challenges that come with this growth. They include how to ensure the self-employed can better save for the future and buy their own homes, as well as how to guarantee them basic workers’ rights and ensure the tax system does not unfairly penalise them. There is also the issue of how we can fully harness their potential contribution to economic growth.