Self Employment Statistics

At GoSimpleTax, we’re passionate about the world of self-employment, which is why we’ve compiled some key facts, figures and statistics about the self-employed, including comparisons between regions, industries, ethnicity, age and gender. 

Contents:

  • The rise of self-employment 
  • Self-employment numbers by industry, ethnicity, age and gender
  • Average weekly income for self-employed workers
  • Self-employment expectations vs reality
  • How does a financial crisis affect young self-employed people?
  • How many self-employed people have staff?

Key statistics:

  • 920,000 of the UK’s 4.95million self-employed workers are in the construction industry
  • Just 15% (742,500) of all self-employed people in the UK are from a white heritage. 24% of the UK’s self-employed workers are from a Pakistani or Bangladeshi ethnicity.
  • Just 33% of the UK’s self-employed individuals are women
  • The average self-employed female worker would earn just over 76% more if she was in employed work. Self-employed women earn an average of £243 per week. Men earn 49% more – £363.
  • One in five young people expect to become self-employed – but only one in ten will do so
  • The biggest factor when deciding to become self-employed is the desire ‘to have an interesting job’

The rise of self-employment 

We are currently experiencing the highest self-employed numbers for 20 years.

As of the July to September period in 2019, 4.95 million people were registered as self-employed.

Data collected between the same quarter in 1999 reveals that only 890,000 people were self-employed – an increase of 4,060,000.

The lowest levels of self-employment in the UK occurred between 2001 and 2002, with a sudden boom between 2003 and 2004. From thereon, the numbers climbed steadily – with a brief drop in 2013 and another boom in 2014.

Self-employment by industry

Of the 4.95 million self-employed individuals in the UK, 920,000 work in construction – the highest number of self-employed workers in any sector.

Following this are:

  • Professional, scientific and technical activities with 643,000
  • “Other services” with 588,000
  • Wholesale, retail and repair of motor vehicles with 396,000
  • Administrative and support services with 361,000
  • Human health and social work activities with 349,000
  • Transport and storage (324,000)
  • Education (255,000)
  • Manufacturing (246,000)
  • Information and communication (240,000)
  • Agriculture, forestry, mining, fishing, energy and water (218,000)
  • Accommodation and food services (173,000)
  • Real estate activities (86,000)
  • Financial and insurance activities (86,000)
  • Public admin and defence and social security (57,000)

Self-employment by ethnicity

Those of Pakistani or Bangladeshi origin represent by far the largest self-employed numbers. Individuals of this ethnicity make up 24.1% of self-employed individuals in the UK.

Those of Chinese and other Asian backgrounds are the next most likely to be self-employed (16.1%), then those of white heritage (15.2%). Indian self-employed workers make up 12.8%, with 12.3% of those from a black background likely to be self-employed.

As is reflected by the overall rise in the number of self-employed individuals in the UK, the number of those working for themselves in each ethnic group has risen considerably since 2011.

Throughout that time, Pakistani and Bangladeshi workers have remained the most likely to be self employed by a considerable margin.

Black UK residents have experienced the most notable change, with the number of self-employed people from this background rising by 51.9%.

Self-employment by age and gender 

The largest percentage of self-employed people in the UK are between 45 and 54 years of age, with the 35-44 age group representing the second largest group. Both feature in excess of 1 million people.

Just less than 1 million people aged 55-64 are self-employed.

750,000 people aged 25-34 are self-employed just over three quarters of a million. Those aged 65+ have just below 500,000 self-employed individuals.

Of course, because most 16-24-year olds are still in education or working part time, they are the least likely to be self-employed. Their numbers reflect this, with just under 200,000 working for themselves.

What is the gender split when it comes to self-employment?

According to the UK Labour Force Survey, 33% of self-employed people are female (equating to around 1.63 million) and 67% are male (3.32 million).

Using these figures, we can therefore estimate that:

  • Approximately 66,666 women aged 16-24 are self-employed
  • Of the 8,990,000 people aged 25-34, 8.34% are self-employed – approximately 247,500 of these are women
  • Approximately 4% of people aged 65+ are classed as self-employed

Average weekly income for self-employed workers

The average income for women who are self-employed on a full-time basis comes in at around £243 per week. Men earn around £363 per week – just over 49% more.

The average full-time self-employed female worker would earn just over 76% more if she was in employed work. Men would earn 47% more in employed work.

Self-employment expectations vs reality

Around one in five young people aged 16 to 21 expect to become self-employed during their future career, while around 9% of those aged 22-30 actually become self-employed after leaving education.

Those who plan to work for themselves tend to make this decision based on a wish to:

  • Have an interesting job (75.1%)
  • Achieve job security (58.6%)
  • Be able to spend time with family (44.5%)
  • Take home a high income (30.8%)
  • Help others (28%)
  • Contribute to society (21.9%)
    Afford a good amount of leisure time (14.4%)

Those who did not expect to work for themselves gave their priorities in a similar order, as follows:

  • An interesting job (70.8%)
  • Job security (60.8%)
  • Family time (38.7%)
  • Being able to help others (25.8%)
  • Achieving a high income (23%)
  • Contributing to society (20%)
  • Having leisure time (11.2%)

Self-employed workers tend to earn less than those in employment on average, with employed women earning over 76% more than self-employed women and employed men earning over 47% more than self-employed men.

How does a financial crisis affect young self-employed people?

Despite this disparity in pay between employed and self-employed people, the self-employed – particularly those between 22 and 30 years of age – are three times more likely to work more than 45 hours per week than those who are employed.

The self-employed are also more likely to be affected by economic crises. The median gross annual earnings for 22-30-year-old self-employed people dropped from over £20,000 in 2006-07 to under £15,000 in 2010-11 during the “credit crunch”.

The amount dropped to around £12,000 in 2012-13 and had still failed to meet its 2006-07 level by 2017.

By contrast, the wages of employed individuals averaged around £25,000 in 2006-07, and dropped very gradually to around £18,000 during the financial crisis. From there, they climbed steadily, surpassing £20,000 in 2015-16.

While 12% of men aged 22-30 work for themselves, just 6% of women of the same age do so. This is likely because a high number of sectors that are male-dominated, such as construction, are also more likely to attract self-employed workers.

In fact, there are only slightly more self-employed men aged 22-30 working in construction than there are women of this age group working for themselves combined.

Despite earning less, the level of education for young women in self-employment is considerably higher than that of young men.

While over 31% of self-employed men aged 22-30 have completed their A Levels or equivalent, around 28% only have GCSEs or do not have any qualifications whatsoever.

Around 18% of self-employed young women have GCSEs or no qualifications, 25% have the equivalent of A Levels, but nearly 52% have a degree or a higher education qualification compared to 32% of males.

How many self-employed people have staff?

In 2001, a slightly higher number of self-employed people had members of staff working for them rather than working alone. This number dropped significantly between 2001 and 2017.

By contrast, between 2001 and 2002, the number of those working for themselves without the support of a team (not counting partners) surpassed that of self-employed individuals with employees and continued to grow.

Sources to add:

https://www.statista.com/statistics/281174/uk-population-by-age/

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