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The average self-employed worker earns more than double the national average salary, although many are working all hours, according to a new report by Boox, the cloud based accountancy service.
Self-employment tax incentives and a recent surge in freelance demand have resulted in a positive increase in freelance pay that dwarfs the national standard annual income, says the report.
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The report is based on a survey of 1,000 British self-employed workers which found 70% of the self-driven workforce earn over the UK’s £26,093 average with the average self-employed salary being £50,820 per year even though 25% of self-employed workers became contractors as a result of being made redundant.
“This report really lays bare the remarkable changes happening in the self-employed sector. Self-employed workers now account for 12.4% of the UK workforce, a 20-year high,” said Phillip Venn, Commercial Director at Boox, who conducted the report. “The economic climate has forced a lot of people out of work and many have used the opportunity to set up business for themselves. Ironically, this employment shift has become one of the positive drivers in the stuttering economy.”
The report also shows 59% of freelancers often work on the weekend with 15% working at least 35 weekends a year. Additionally, 40% of self-employed workers work longer than the average 41 hours per week, with 15% putting in more than 51 hours of work. Some 24% take no annual leave and 45% of those who do work on holiday. Self-employed people are twice as likely to check work emails on holiday as employed people, says the survey.
One of the drivers of self-employment, according to Dr. John Glen, senior lecturer in Economics at Cranfield School of Management, is what he calls projectisation. “The increased projectisation of work and an increasing preference for employees to hire contract workers has all led to today’s self-employed workforce becoming an economic powerhouse.”
“As the Boox Report reveals, becoming self-employed can enable workers to earn more money than they might in permanent employment. Employers value the skills and expertise this diverse group of workers bring to an organisation. The rise in the number of self-employed workers is also beneficial for government because it is a key driver of wealth creation, employment and diversity.”
Boox says there are three very clear motivators for going freelance: 30% want to be their own boss, 25% are prompted by a major event such as redundancy, and 19% go in search for a better work-life balance. Struggling to find work is the motivator for just 4% of people going freelance.
The report found just over two in three freelancers are male, 69%, compared to 31% of females. However, it suggests that women are driving the next generation of freelancer with one in ten women freelancing between 24 to 34 years of age compared to only 4% of men.
Other findings include:
– 31% have a professional qualification, only 4% have no qualifications, nearly one in four, 23%, are educated to undergraduate level, whereas 12% have a masters and 8% another form of postgraduate degree.
– One in four, 26%, intend to retire after 70 year of age or never at all. 18% intend to retire before the age of 60 and a lucky 1% before the age of 45.
– More than one in four freelancers, 26%, have paid too much tax, and just over one in ten, 11%, have paid too little. Combined it means nearly four in every ten freelancers have got their tax calculations wrong, says the report.
For the full report, click here.