1 in 5 self-employed households struggling with financial worries

2nd February 2017

The financial stresses and pressures of self-employment are taking their toll on family life, according to the latest report from Scottish Widows’ think tank, the Centre for the Modern Family. Findings of ‘Self-employment and the Family’ show that one in five relatives of a self-employed worker (20%) report increased stress levels in their household due to their career choice.

With the number of self-employed in the UK up by 133,000 in the last year (and now accounting for 15% of the total UK workforce) the impact it has on family life is a worrying trend, especially as the research suggests that for many, the decision to leave traditional employment is driven by a desire for a better work-life balance.

Over half (53%) of self-employed people left traditional jobs in search of greater control and flexibility in their working life: 53% wanted to be able to choose their own hours, and 17% needed to fit work around childcare responsibilities. For women especially, it appears self-employment provides an opportunity to fit working hours around childcare, with nearly half of self-employed mothers (46%) choosing self-employment for this reason, compared to just 7% of self-employed fathers.

As a direct result of being their own boss, over a third of self-employed people (35%) say they can spend more time with their family, a figure which rises to half (49%) amongst mothers.

However, nearly one in five people (19%) with a self-employed relative claim their family member has more financial worries since becoming their own boss, while 20% say this person is generally more stressed as a result of their career choice and one in ten (11%) say their whole family is under more stress as a result. What’s more, nearly one in five of those in a self-employed household (18%) say their family member is always on call for work.

Despite the perceived benefits of self-employment, a significant proportion of the UK’s workers are hesitating to take the plunge. Two fifths (42%) of the workforce claim they want to be their own boss, yet only 5% have plans to do so in the future. Instead, one in four (40%) say they prefer the financial security of being a permanent employee and 39% enjoy the benefits – such as a pension, parental leave and sick pay – too much to become self-employed.

However, with more support, budding entrepreneurs say they’d have the confidence to strike out on their own; 27% say that better financial support from the Government would encourage them to become self-employed. For 50%, more practical support, such as online forums, local entrepreneur networks and Government guidance, would help overcome the barriers.

Anita Frew, Chair of the Centre for the Modern Family, said: “To a growing number of people, self-employment offers a chance to structure a rewarding career around family life. However, our research suggests that the pressures and stresses of being their own boss may, for some, be too much for a family. With more and easier access to practical and financial support, individuals may feel better equipped to make their path in self-employment less stressful for themselves and their families, and bring them more of the benefits which attracted them to self-employment in the first place.”

Scottish Widows urges the Government to make self-employed pension contributions exempt from National Insurance and believes this would be a good step in the right direction.