5.3 million Brits want to go freelance Brits go freelance

5.3 million Brits want to go freelance

  • Approximately 8.6 million people currently work on a freelance basis but another 5.3 million dream of one day becoming their own boss.
  • Those planning a career as a freelancer usually spend eight months preparing to go it alone and aim to save around £16,000 to give their business the best start.
  • Key issues that keep budding entrepreneurs from taking the leap into the freelance life are tax concerns, the ability to take time off and meeting existing financial commitments.

The entrepreneurial dream is alive and well in the UK reveals new research collated by Direct Line for Business1. Some 5.3 million people (10 per cent) dream of becoming their own boss in the future, embracing a career as a freelancer. This is in addition to the 8.6 million (16 per cent) who currently freelance and are either fulltime self-employed or carry out contract work alongside their main jobs. A further one in eight (12 per cent) Brits have previously freelanced.

Breaking into freelance work is something many people will only consider if they have a nest egg saved up, especially if an initial contract or client hasn't been secured. Overall, 71 per cent of self-employed workers saved up money before going freelance, leaving a plucky 29 per cent who admitted that they had nothing saved before starting their business.

The average freelancer saves up £16,000 before setting up their own enterprise, a significant chunk of money and the equivalent of 70 per cent of the annual salary in the UK2. Most do this to allow for potential shortfalls in monthly income (43 per cent), to ensure they have funds to purchase essential business goods (34 per cent) and to build up a fund for holidays or sick leave (16 per cent). For more than two thirds (69 per cent) of the self-employed people who saved up money before going freelance, this money was enough to meet their needs. This should all be encouraging news for the one in 10 Brits (5.3 million people) who have never been self-employed but dream of one day setting up their own business.

It isn't just money that needs to be considered by prospective freelancers before leaving full time employment, as 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. The majority (73 per cent) spend time preparing to become self-employed, whether that is by reading up on tax implications (27 per cent) or identifying target markets and audiences (25 per cent). However, nearly one in three (30 per cent) spend less than a month getting ready to go it alone.

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."

Dealing with tax issues is one of the biggest concerns for freelancers before setting up shop, with a third (33 per cent) 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 per cent). One in five (20 per cent) worries about marketing and bringing in new clients and the same amount again about not being able to save for a pension (19 per cent).

Table one: Concerns for potential freelancers

Top concerns for freelancers Percentage who list this concern
Dealing with tax issues 33%
Not getting paid when on holiday 26%
Being unable to meet existing financial commitments 26%
Marketing and bringing in new clients 20%
Not saving for a pension 19%

Source: Direct Line for Business, 2018

Jazz Gakhal, Managing Director at Direct Line for Business said: "If you do provide a professional service to clients, either as a contractor or freelancer, it's important to have the right insurance in place. Direct Line for Business offers flexible insurance that can be personalised to reflect the ever-changing needs of your business, so you don't have to take out a new policy every time your role, premises or revenue changes, which saves time and hassle. In addition, we don't charge admin fees to make mid term changes to your policy."

For more information about Direct Line's small business insurance for contractors and freelancers visit the website.

Notes to Editors

1 Research conducted by Opinium amongst a nationally representative panel of 2,007 UK adults between 6th and 9th November. Of this number, 11 per cent were currently self-employed, 12 per cent had been self-employed in the past and five per cent occasionally work as a freelancer. This produced a panel of 566 freelancers, with a further 10 per cent of adults hoping to one day become a freelancer.

2 Based on a net median UK salary of £23,208 in 2018 (ONS Annual Survey of Hours and Earnings 2018, published 25 October 2018).

For further information please contact:

Citigate Dewe Rogerson
Samantha Stewart
Tel: 020 7282 2856
Email: samantha.stewart@citigatedewerogerson.com

Direct Line Group
Unni Henry
Senior PR Consultant
Tel: 01903 636 149
Email: unni.henry@directlinegroup.co.uk

Direct Line for Business

Launched in 2007 Direct Line for Business provides a range of insurance products for the small business sector direct by phone or on-line.

Direct Line for Business insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line for Business and U K Insurance limited are both part of Direct Line Insurance Group plc.

Customers can find out more about Direct Line for Business products or get a quote by calling 0345 301 4827 or visiting www.directlineforbusiness.co.uk

Press Release Small Business Insurance

Added: 27 Mar 2019