You are here: Home - Household Bills - News -

5.3m dream of being their own boss

0
Written by:
28/03/2019
5.3 million dream of quitting corporate life and becoming self-employed – around 10% of the work force.

Around 8.6m people are currently freelance, equivalent to 16% of the workforce. This includes those who are either full time self-employed or carry out contract work in addition to their main job.

The research, collated by Direct Line for Business, found the average freelancer saves up £16,000 before going freelance, equivalent to 70% of the average UK salary. Overall, 71% of self-employed workers saved up money before going freelance to allow for shortfalls in monthly income, to buy essential business goods or to give them a cushion for holidays and sick leave.

For most people who go freelance, this was enough to meet their needs. Only around a third (31%) said they needed more.

Preparation

Aspirant freelancers also need to consider that they they will be taking sole responsibility for tax and legal issues. On average, self-employed workers spend seven months and three weeks preparing to go freelance. That may be reading up on tax implications (27%) or identifying target markets and audiences (25%).

A few freelancers are more gung-ho. Nearly one in three (30%) spend less than a month getting ready to go it alone and 29% have no savings before they start.

Dealing with tax issues is one of the biggest concerns for freelancers before setting up shop, with a third (33%) seeing this as a major hurdle for going it alone. Other issues include not getting paid when on holiday and being able to meet existing financial commitments (both 26%).

Pension worries

Only one in five worries about their pension, in spite of research showing that the self-employed have poor provision for retirement. They don’t benefit from auto-enrolment or company contributions.

Jazz Gakhal, managing director at Direct Line for Business said: “Going freelance is an exciting prospect, with the idea of becoming your own boss extremely tempting. There are pros and cons, of course, as independent contractors can often earn more by charging day rates, but don’t benefit from paid holiday, pensions and sick leave. Any budding entrepreneur should consider the value of these additional benefits as well as any change in salary before making the leap.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
A row of terraced houses overlooks a view of London
Average council tax bill to rise by £78 from April: check you aren’t overpaying

The average council tax bill in England will go up by 4.7% or £78 from 1 April, according to official...

Close