Self-employed's reality not matching expectation

The earnings advantage that the self-employed have been scorned for having is one of the main motivators for one in seven Brits who want to become self-employed.

This perception that people make more money if they work for themselves is most prevalent among 25 to 34-year-olds, almost half of whom believe it, according to Aldermore.

But the specialist lender found that the reality is quite different, as while 37% said greater money-making was the incentive, 50% who are already freelance said they do not earn more.

Take-home pay was not the only miscalculation. Irregularity of income was a concern for 32% of the would-be freelancers, but it was a problem for a larger 55% of actual freelancers.

Similarly, only 24% of aspiring self-employed people cited inconsistent cash flow as a likely issue -- whereas among those already working for themselves, it affected more than 40%.

Also, work being irregular and not getting paid promptly for it were only foreseen by 18% and 11% respectively. In reality, 52% suffer from irregular work; 44% from late payment.

“[Self-employment] can be a risk, with uncertainty and financial instability from start up,” said Aldermore’s Charles Haresnape.

The lender's findings are based on a YouGov poll it commissioned of more than 2,000 adults (about half were employees), which ran online last month.

Feb 20, 2017
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