Lonely mountain

Almost two-fifths of the country’s self-employed cite loneliness ss a real issue, but most say they still love being their own boss.

There are over 4.6 million people currently self-employed in the UK*, and according to a new report from Aldermore, the specialist bank.

And nearly all (93 per cent) enjoy being their own boss. However, whilst predominantly positive, the self-employed in the UK are currently struggling with feelings of loneliness and a loss of control which need to be addressed if more people are to successfully make the transition.

Emotional impact

The report reveals that 39 per cent of Brits say that they have felt lonely since becoming their own boss. This is most common amongst millennials (25 – 34 year olds), with over half (54 per cent) saying they have experienced this feeling.

For many, becoming self-employed has been a positive experience, and 82 per cent believe it has given them a greater sense of control over their own destiny. However, for some this is not the case, with almost one in six (17 per cent) saying they feel less in control of their lives. Again, this is particularly felt amongst those aged 25 – 34 year olds (34 per cent). Work-life balance is another issue for entrepreneurs, with over a quarter (28 per cent) of self-employed believing they have no time for themselves.

Pressure of workload

The report also identifies the most common hurdles experienced by business owners. Over half (55 per cent) of those currently self-employed are concerned by the irregular income and irregular work (52 per cent) they receive. In addition, more than four in 10 (44 per cent) self-employed respondents are often not paid by clients on time and almost one in five (19 per cent) have concerns around winning new business:

Concerns before becoming self employedAs actually experienced whilst self employed
Regular source of income56 per cent55 per cent
Irregular work48 per cent52 per cent
Inconsistent cash flow (i.e. money moving in and out of my business)45 per cent41 per cent
Getting new business in37 per cent19 per cent
Difficulties in paying bills (e.g. mortgage, utilities, etc.)33 per cent18 per cent
Failure of business33 per cent4 per cent
Not being paid by clients on time27 per cent44 per cent
Ability to secure a mortgage whilst being self-employed17 per cent10 per cent
Lack of free time13 per cent28 per cent
Difficulty 'keeping ahead' of competitors11 per cent10 per cent
Unmanageable volume of work10 per cent15 per cent
A lack of support in taking business 'to the next level'10 per cent10 per cent
Arranging business insurance7 per cent15 per cent
Funding business through the remortgage of personal property3 per cent3 per cent
Getting health and safety accreditations2 per cemt4 per cent

The report has shown that the key driver for those looking to take the leap is the prospect of earning more money (37 per cent). Being able to improve work-life balance (35 per cent) is also a top reason. Although the majority of self-employed respondents (71 per cent) say being their own boss has improved their work-life balance, making the transition is also fraught with difficulties. This is why the bank hopes to make things easier for those taking the leap by offering flexible financial support.

Following a review of self-employed mortgage criteria, Aldermore has taken the decision to reduce the number of years accounts a self-employed borrower must provide when applying for a residential mortgage – from two years to one – and taking into consideration profit retained within the business when assessing affordability. These changes will provide applicants with additional flexibility and support, helping them to purchase a new home or remortgage their existing one.

Charles McDowell, Aldermore’s Commercial Director, Mortgages, says: “With four million British workers (17 per cent) aspiring to be their own boss at some point during their working life and one in 10 (12 per cent) aiming to make the transition in the next six months, it’s important they understand the realities. While we believe it is a brave and bold decision, and most love being their own boss, it’s apparent from our research being solely accountable can bring about feelings of isolation and stress.

“The self-employed are integral to our economy and we believe that more needs to be done to support them, as well as to encourage more to make the transition. We want to do our part by trying to ensure some security when it comes to home-buying.

“All too often self-employed borrowers do not fit the cookie cutter approach of many lenders and it can be a real challenge for the self-employed to receive the financial support they need to buy a home. This is why we are working to simplify the process of applying for a mortgage.”

Duncan Bannatyne says: “There has to be more done to support entrepreneurial Britain and in particular the self-employed as a crucial growth area for the economy. I know from experience that building a business is a massive challenge that at times can be very lonely particularly as you adjust to an irregular income and an uncertain future. However, what cannot be underestimated is the sense of reward and fulfilment that can be achieved from building a business from the ground up and being the master of your own destiny. With determination and dedication anyone can do it but the support network needs to be in place to help them achieve this.”