According to new research from Aldermore, almost three in 10 (29%) British workers, the equivalent of nine million people, plan to make the ambitious move to become self-employed in the future. Compared to research conducted last year, this is an increase of five million British workers, as only four million (15%) planned to make the move 12 months ago.
Of those who aspire to become self-employed, over one in six (18%) intend to make the move in the next year, while for a further 28% it will take three years.
When exploring what type of business aspiring entrepreneurs want to start, one in seven (15%) would launch in the retail sector. This is closely followed by the catering and accommodation industry for just over one in 10 (11%).
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%) of those self-employed have been able to earn more money than in their previous job, and almost three in 10 (29%) 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%) expecting to see an increase, followed by almost a third (32%) in the North West.
The political and economic uncertainties don’t seem to be a concern, with over half (53%) saying Brexit negotiations will have little impact on their business.
Although the research has revealed that seven in 10 (70%) 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%) were worried about not having a regular source of income, and almost two fifths (38%) were worried about an irregular volume of work. These concerns are proven; half (50%) of those already self-employed have experienced irregular income and two fifths (40%) have had to deal with inconsistent cash flow. Other difficulties encountered by the self-employed are late payments from clients (37%), as well as a lack of free time (21%). Despite these challenges, almost all (93%) 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%) 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%) believe this is a problem, and over half (56%) 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.”