The number of self-employed workers aged 60 and over in the UK has reached an all-time high, with 991,432 people in this age group now working for themselves. This marks a significant 33% increase over the past decade, highlighting a growing trend of older workers turning to self-employment. According to data from Rest Less, a digital community for those over 50, this age group now accounts for 23% of the UK’s self-employed workforce. The total number of self-employed workers across all age groups is approximately 4.1 million, underscoring the considerable presence of older individuals in this sector.
While the number of self-employed workers in their 50s and older has been on the rise since 2021, particularly those in their 60s who have driven this increase. Over-50s now make up nearly half (49%) of the self-employed workforce in the UK. Additionally, a notable portion of this group includes individuals aged 70 and over, with 223,086 people in this category reported to be self-employed.
Several factors contribute to this trend. Financial necessity plays a significant role, as many older workers have discovered that what they once considered adequate pensions and savings are no longer sufficient to cover their living expenses. With the state pension age rising and the cost of living continuing to increase, many older individuals are seeking additional income sources. Self-employment offers the flexibility they need to manage other responsibilities, such as caregiving or health issues, while still earning money.
Beyond financial needs, some older workers pursue self-employment to stay active and engaged. After decades in traditional employment, many find retirement unappealing and seek to continue contributing to the economy. Self-employment allows them to leverage their skills and experience in new ways, often by starting businesses or offering freelance services. The rise of the gig economy and technological advancements have made this transition easier for many older workers.
However, the increase in self-employment among older workers is not without challenges. While self-employment can offer greater flexibility, it often comes with financial risks. Self-employed individuals cannot access the same benefits as traditional employees, such as paid holidays, sick leave, or employer pension contributions. This lack of financial security can be particularly concerning for older workers, who may face higher healthcare costs or unexpected expenses. Research by the Resolution Foundation indicates that self-employed older workers typically earn less than their younger counterparts. Usually, male full-time self-employed workers have a median net earnings of £20,800 per year, while female full-time self-employed have a median net earnings of £14,200 per year.
The COVID-19 pandemic has exacerbated some of these challenges. Many self-employed workers, particularly older ones, saw their incomes decline as demand for their services dropped during the crisis. Government support schemes, while helpful to some, did not always provide adequate assistance to this group, leaving many struggling to make ends meet. Despite these difficulties, the trend of older workers turning to self-employment shows no signs of slowing down.
The Office for National Statistics (ONS) data reveals that the number of part-time self-employed workers aged 65 and over increased by 28.7% in the second quarter of 2022, rising from 264,761 to 340,779. Their average hours worked mainly fell within 16 to 30 hours per week. This increase underscores the growing importance of self-employment as a means of sustaining income in later life. It also reflects broader demographic and economic trends, as more people live longer and work beyond the traditional retirement age.
The rise in self-employment among older workers has indeed caught the attention of policymakers, leading to calls for reforms to better support this growing segment of the workforce. These reforms focus on extending access to statutory sick pay (SSP) and other benefits that self-employed individuals currently lack. For example, many have advocated for a contributory sick pay scheme specifically for self-employed workers, ensuring they receive similar protections to employees during periods of illness. This would address the financial vulnerabilities older self-employed workers face, who often have less time to recover from financial setbacks than their younger counterparts.
In addition, there have been discussions around revising the tax system and improving social security benefits to better support self-employed individuals. This includes proposals to offer more targeted financial advice and support, helping older workers navigate the complexities of self-employment and ensuring they are not disproportionately disadvantaged during periods of ill health. There is also a need for increased awareness among older workers about the potential risks and rewards of self-employment. Financial planning and education can play a crucial role in helping older workers make informed decisions about their careers and retirement. This includes understanding the importance of retirement savings, managing healthcare costs, and preparing for unexpected expenses.
In conclusion, the rise in self-employment among older workers is a complex and multifaceted phenomenon. It reflects broader changes in the economy, demographics, and the nature of work. For many older workers, self-employment offers a viable alternative to retirement, allowing them to maintain their independence and financial stability. However, it also highlights the need for policymakers, employers, and workers themselves to address the unique challenges faced by this growing segment of the workforce.
