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Less than half of people who say they’d like to be self-employed are achieving this aspiration, reveal new figures from Citizens Advice.

A new report by the national charity finds two in five (40 per cent) people would like to work for themselves.  Yet only 15 per cent of the UK workforce is currently self-employed.

The gap between aspiring to be self-employed and this being a reality is particularly acute among adults under 35. Almost half (48 per cent) of people aged 18-34 say that they would like to be self-employed. Yet in reality only 7 per cent of 16-34 year olds who are employed work for themselves.

The research also includes in-depth interviews with self-employed people which identifies a number of challenges faced by those setting up on their own, including:

• Insufficient financial resources.

• Gaps in the skills required, such as budgeting or business planning.

• A lack of practical support with tasks such as completing tax returns.

• The absence of peer support and guidance.

The report Going Solo warns that these challenges risk creating a barrier to people fulfilling their ambition of working for themselves, and that potentially viable businesses are failing unnecessarily for the want of guidance in the early stages.

Citizens Advice also highlights that many people now actively choose to become self-employed in order to fit in with their lives and caring responsibilities.  Those interviewed in the report say that while working for themselves does not necessarily deliver high levels of financial security it is a trade-off they were willing to accept.

Since 2008 the average earnings of self-employed people have fallen from £233 to £207 per week, compared with employees where median income has risen from £388 to £425 per week. On average it takes three years for a business to develop before a self-employed person earns the equivalent of the national minimum wage.

Chief Executive of Citizens Advice Gillian Guy said:

“A lack of support is thwarting people’s ambition to be self-employed.

“For some people self-employment can be a good way to manage their work life balance or a necessary step for work in their industry. But too many are unable to access the help they need to go it alone with confidence.

“Self-employment is increasingly a mainstream career option but it can be complicated, particularly when you’re first starting out. Ensuring the right support is on hand for newly self-employed people will go a long towards helping them make a success out of their new businesses.”

Since 2011 the proportion of people turning to local Citizens Advice for help who are in work and  self-employed has increased by  50 per cent. Over 56% of people who ask for advice on self-employment issues earn below the national minimum wage for a 35 hour week, and also most commonly have debt, employment and benefit issues.

Citizens Advice has identified ways to give self-employed people the security they need to manage their work-life balance and develop their business, including:

• Agencies such as Jobcentre Plus or local Chamber of Commerce help people develop the necessary skills for starting out as self-employed including financial planning and understanding the tax system.

• Jobcentre Plus staff with specialist skills for helping self-employed people, who can decide when a business has been given sufficient time to develop before cutting down tax credit or Universal Credit support.

• The development of peer networks among communities of self-employed people including online tools.

Notes to editors

1. Poll of 801 UK adults conducted by BMG Research for Citizens Advice 11-17 November 2015.  
2. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
3. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
4. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
5. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
6. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
7. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.