Yahoo Finance Self-employed estimated to contribute £125bn to UK economy in 2021 despite COVID challenges
The UK’s growing self-employed and “side hustler movement” will contribute an estimated £125bn ($174bn) to the UK’s economic recovery in 2021, new data revealed.
Research by Mettle, the NatWest (NWG.L)-backed business account, using YouGov’s platform, also said small and medium-sized businesses (with 1 to 49 employees) are estimated to contribute approximately £310.46bn.
In 2019, the Office of National Statistics found over 1.1 million people were either employed in two jobs or self-employed in addition to having another job.
The population of self-employed workers in the UK is now over 5 million, making up 15% of the UK’s workforce.
Marieke Flament, CEO of Mettle, noted that “more people are choosing to start or create something of their own than ever before due to changing lifestyles, personal circumstances, or fulfilling a personal ambition. This research highlights the importance of this growing movement for the UK’s economic recovery in 2021.”
The pandemic has pushed more people to work for themselves than ever before, either through choice or out of necessity of being furloughed or made redundant, the report said.
About 25% of all UK adults now consider themselves to be a side hustler, according to Henley Business School at the University of Reading.
Having a side hustle such as freelance design work or wedding photography in addition to a full-time job has for the first time for many become a necessity to supplement income.
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According to Mettle, the most popular motivation for this was the flexibility and freedom it provided (57%), followed by their desire for a change in work-life balance (38%), and wanting more meaning and purpose in their life (24%).
Those aged 55 and over are leading the way, with 38% of limited companies and side hustles formed post-March 2020 having been established by that age group.
However, the pandemic has also made the challenge of running a business or side hustle more difficult.
57% of those surveyed are not looking to expand their business or side hustle or enter a new sector in 2021, with over a quarter of specifically not looking to expand (29%) due to the UK’s economic uncertainty.
The report also found that the self-employed and “liquid workforce” movement is being supported by a rise in challenger banking solutions that provide online products and services.
The majority (83%) of respondents who use challenger bank services and feel supported by them felt this was because of their bank’s ability to get things done quickly (61%) and the fact that their innovative technology is are more compatible with their business needs (51%).
Meanwhile, a report from last month said that a quarter of the UK’s self-employed could be facing a double tax bill this tax return season.
New research from Intuit Quickbooks, which provides accountancy software for small and medium-sized businesses, showed that those who deferred their 2019-2020 payments due to the coronavirus will owe double, as the 31 January deadline draws nearer.
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