Self employment hits 40-year high

Self-employment is higher than at any point over past 40 years, according to figures from the Office for National Statistics.

The ONS says 4.6 million people were self-employed in their main job in 2014,  accounting for 15% of those in work, which is the highest percentage since data were first collected. There were also an additional 356,000 employees who had a second job in which they were self-employed.

It adds that the rise in total employment since 2008 has been predominantly among the self-employed and is mainly due to fewer people leaving self-employment than in the past despite the fact that the average income of self employed people has fallen by 22% since 2008/9.

Total employment in the second quarter of 2014 was 1.1 million higher than in the first quarter of 2008, just before the economic downturn that hit the UK. Of this increase, 732,000 was among people who are self-employed so the rise in total employment since 2008 was predominantly among the self-employed. The total number of employees rose by 339,000 over the same period.

The percentage of people starting self-employment, also known as the inflow rate, over the past 20 years has been fairly constant, hovering around 36% to 38%. The percentage of people leaving self-employment, or the outflow rate, was between 32% and 37% until the most recent five-year period where it fell to 23%. The ONS speculates that the reasons for this include difficulty in finding employed work and people working beyond the state pension age.

It says self-employed workers tend to be older than employees and are more likely to work higher (over 45) or lower (8 or less) hours than employed workers. The number of over 65s who are self employed has more than doubled in the last five years to reach nearly half a million.

The number of women in self-employment is increasing at a faster rate than the number of men. In 2014 women made up just under one third of the self-employed (1.4 million). Since 2009 the number of self-employed women has increased by 34%. By comparison over the past five years the number of self-employed men has risen by 15% to 3.1 million in 2014. Despite the rise in women being self-employed, men still make up 68% of self-employed workers, says the ONS.

It suggests part of the reason is that work in skilled trades in male-dominated industries such as construction have suffered more from the effects of the economic crisis than the service sector and professional occupations that self-employed women tend to work in.  The top three occupations for self-employed women are cleaners and domestics, childminders and related occupations and hairdressers and barbers.

The most common self employed roles overall are working in construction and taxi driving and in recent years there have been increases in self employed management consultants.

The ONS adds that across the European Union the UK has had the third largest percentage rise in self-employment since 2009.





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