Almost three in 10 British workers aim to become self-employed in the future – up from 15 per cent in 2017, representing a further 5 million people, finds new research.
According to new research from Aldermore, almost three in 10 (29 per cent) British workers, the equivalent of nine million1 people, plan to make the ambitious move to become self-employed in the future. Compared to research conducted last year2, this is an increase of five million British workers, as only four million (15 per cent) planned to make the move 12 months ago.
Of those who aspire to become self-employed, over one in six (18 per cent) intend to make the move in the next year, while for a further 28 per cent it will take three years.
When exploring what type of business aspiring entrepreneurs want to start, one in seven (15 per cent) would launch in the retail sector. This is closely followed by the catering and accommodation industry for just over one in 10 (11 per cent).
Ambition paying off
Making the transition to self-employed can be a risky life decision, but the research shows that the ambition is paying off for those that have already made the move. Over half (51 per cent) of those self-employed have been able to earn more money than in their previous job, and almost three in 10 (29 per cent) expect their revenues to increase in the next 12 months. Across the UK, the self-employed based in London are some of the most confident about revenue growth with over a third (35 per cent) expecting to see an increase, followed by almost a third (32 per cent) in the North West.
The political and economic uncertainties don’t seem to be a concern, with over half (53 per cent) saying Brexit negotiations will have little impact on their business.
Although the research has revealed that seven in 10 (70 per cent) self-employed believe they made the move at the right time, they also highlight there were a lot of factors to consider when deciding to make the transition, with financial fears causing the most concern. Over four in 10 (44 per cent) were worried about not having a regular source of income, and almost two fifths (38 per cent) were worried about an irregular volume of work. These concerns are proven; half (50 per cent) of those already self-employed have experienced irregular income and two fifths (40 per cent) have had to deal with inconsistent cash flow. Other difficulties encountered by the self-employed are late payments from clients (37 per cent), as well as a lack of free time (21 per cent). Despite these challenges, almost all (93 per cent) have said they enjoy being their own boss.
Aside from the challenges of running their own business, the self-employed have cited difficulties trying to secure a mortgage. When asked about the mortgage process, seven in 10 (70 per cent) believe it is harder for those who are self-employed to secure a mortgage. A major challenge the self-employed face is having enough evidence to verify their income; seven in 10 (70 per cent) believe this is a problem, and over half (56 per cent) feel lenders are less understanding of the circumstances of the self-employed.
Commenting on the research, Charles McDowell, Aldermore’s Commercial Director, Mortgages said: “The research demonstrates that the UK is a truly entrepreneurial nation with nine million people considering making the ambitious move to become self-employed. This is a significant increase from the four million in 2017, and we believe this will put the UK economy in good stead for the future.
“It takes a lot of courage to make the major life decision to become self-employed, and it is encouraging to see almost three in 10 expect their revenues to increase in the next 12 months, which is a positive outcome in light of myriad uncertainties.
“That said, there are still a number of challenges they face in day-to-day life, one being securing a mortgage. Our research has shown that seven in 10 self-employed think it is harder for them to secure a mortgage. This is far too high a figure and mortgage providers need to adopt to the new economy. At Aldermore, we believe those who have made the bold decision to become self-employed shouldn’t be punished for not fitting the traditional ‘norm’. We make things easier for the self-employed, so we offer a human approach to lending which considers each applicants’ circumstances on an individual basis. We want to support entrepreneurs and make people who need specialist lenders feel special.”