“Massive shift” towards self-employment expected to accelerate over the next year

More and more of the UK workforce are expected to make the jump to self-employment over the next 12 months, with 11% (3.5 million people) intending to start their own business, according to new research from AXA.

The study of 9,000 UK residents found that 87% had already taken “significant steps” towards starting a business including applying for finance, taking qualifications or developing a website, while 40% already had a project underway with a client.

The report suggested that people are uncertain about the future of their employment, with 40% of those surveyed claiming their current job is unlikely to last beyond 2021, another 10% not expecting it to last the year and an equal proportion (10%) saying they don’t feel secure from one month to the next.

It was actually those in middle management or corporate roles (chief financial directors, CEOs, Senior marketing managers) that felt the most insecure, with 45% not expecting their job to last beyond 2021.

Brexit (27%) was cited as the top contributor to job insecurity, followed by poor management culture (25%), current government policy (20%), and the threat of automation (7%).

When asked why they wanted to start a business, many expressed a desire to “reduce dependency on outsiders” such as employers and larger companies. 66% said independence or self-reliance was their main motivation, with 39% using the world control when asked for further explanation.

53% of respondents intended to quit their job after starting up, while another 30% planned on reducing their hours and around 20% said they would never give up the security of their job.

The older generation of aspiring entrepreneurs were the least risk averse: 70% of those aged over 45 said they would quit their job in comparison with just 20% of younger entrepreneurs.

50% of those surveyed admitted that they would draw upon savings to help survive a fluctuating business income, followed by a partner’s income (40%), credit cards (25%) or loans from family and friends (29%).

The older generation were also more likely to make a major departure from their current job; 80% of over 55s said they would start up in an unrelated field. 67% of all respondents said their business idea was not directly related to previous jobs and 47% said it was entirely unrelated.

Gareth Howell, managing director of AXA Insurance, commented: “This research just reveals the tip of the iceberg. We believe there is a seismic shift underway in the way people work and plan for their futures. Running a business is no longer the preserve of the few, but is becoming a normal career progression, whether it runs alongside a job or is the sole source of income.”

“Disruption is becoming the norm in our working lives too: by the age of 25 most people have had at least four jobs, and by 55 – seven. Combine this with an external world that looks less and less predictable post-Brexit, and starting a business can be seen as a good insurance policy, particularly for those with a good financial cushion or who can keep their day job going too.”