The numbers don’t lie as they say and it looks like the self-employed have been the hardest hit by the pandemic, according to the latest ONS figures.
- Throughout the pandemic, self-employed workers were consistently more likely to report reduced hours and reduced income than employees
- The self-employed were less able to make ends meet than before the pandemic, unlike the population as a whole
- Self-employed workers were more than twice as likely as employees to report borrowing money during the pandemic
- Over a third (34%) of self-employed people reported reduced income compared to just 10% of employees
At the end of March 2021, as the third lockdown started to ease, 28% of self-employed workers continued to report reduced hours compared to just 5% of employees. Similarly, over a third (34%) reported reduced income compared to just 10% of employees.
ONS
Self-employed have had to borrow more than other workers
Self-employed workers were also more than twice as likely as employees to report borrowing money during the pandemic, although this gap narrowed during the Summer of 2021, as restrictions were lifted. In the week to 1 August 2021, more than 7% of self-employed workers were using savings, compared with less than 3% of employees.
This may reflect self-employed workers’ higher likelihood of having significant savings to draw on. On average, more than three-quarters (76%) of self-employed households had enough financial assets to cover a 25% fall in their household employment income, and 61% could cover a 75% fall for three months.
Self-employed respond to the ONS findings:
“Despite the lack of Government help (with the recent tax hikes a particular thorn in the side), I am back fighting twice as hard.”
– Rachel Hayward of Ask the Chameleon
“The findings of this report don’t come as a surprise,” says Rachel Hayward, Managing Director at Ask the Chameleon, a commercial tender specialist.
“The pandemic certainly made me doubt my decision to work for myself when my order book was almost bare, and certainly in the first two weeks of lockdown when my pipeline disappeared completely,” said Hayward.
“However, despite the lack of Government help (with the recent tax hikes a particular thorn in the side) I am back fighting twice as hard.
“I didn’t become self-employed believing I would be rich, as I probably earned more when I was employed, but for the freedom it provides. And despite the hell of the past 18 months or so, I’m still glad I made the choice,” she said.
“Being a limited company, I wasn’t entitled to a penny of support and that hasn’t changed to this day.”
-Amy Lainchbury, Social Media Expert at Tasty Comms
“Being a limited company, I wasn’t entitled to a penny of support and that hasn’t changed to this day. No wonder the self-employed have been harder hit than the employed,” said social media expert, Amy Lainchbury, who runs her own business, Tasty Comms.
“It’s definitely one of the reasons the recent tax hikes are particularly grating. I had £60k+ worth of client business booked for 2020, and almost overnight it turned to zero, with no sign of being able to replace it.
“Being in events and hospitality, it was inevitable I’d suffer after lockdown was announced, but I was shocked by the extent of the damage to my industry, and the difficulty I had turning my situation around. It’s horrifying to spend four years building a business and have it disappear in a heartbeat.
“I slowly and painfully scraped my business back together, partly by expanding sectors, partly by teaming up with big agencies and other businesses,” said Lainchbury.
“When the pandemic first hit, we saw new business enquiries disappear overnight,” said Scott Gallacher, Director at financial planner, Rowley Turton.
“We were fortunate that we had loyal clients, ongoing income and strong reserves,” said Gallacher.
“Hence we not only weathered that storm but were also able to invest in a new larger office to allow greater social distancing.
“However, we saw fabulous well-established businesses, through no fault of their own, destroyed by the lockdown. But on the other side of the coin, we also have clients that set up craft supply businesses during the pandemic that boomed due to us all taking up lockdown hobbies,” he said.
