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73% of Self Employed Called “Financial Underclass”

Many think self employment is all about living the high life. Not true. New research says that self employed are the “financial underclass.”

This research was compiled by a financial services company who obviously know what they are talking about when it comes to the subject of money, so it makes sense that we should all sit up and take notice about these findings.

The exact figure they came up with was 73% of self employed people, who, in their findings, are behind when compared to traditional employees in areas such as earnings and pension plans.

Delving deeper into the figures, we find that self employed typically have, on average, £200 or less of discretionary income a month when compared to full time employees, which isn’t exactly ideal now is it.

One media expert commented that this has a lot to do with the “Uberisation” of the employment market, where workers are basically being forced into self employment against their will and then stripped of any benefits that traditional employees enjoy.

While this can happen (and it does), in my opinion I reckon that many of the freelance type jobs offered by companies such as Uber are fair game and they are doing nothing wrong, but that is a subject I’ve covered fairly extensively here on this blog.

As for the point about 73% of the self employed being the so called “financial underclass?” Well, yes they are, and always will be, when you consider that around 95% of the wealth is controlled by 5% of the population.

However, that doesn’t mean you can’t become self employed or start a business and become very successful. In my opinion, forget about these kind of statistics and just focus on doing what you do best, and then making a lot of money doing it.

The one point I do agree on is that self employed people in general are not fairing very well when it comes to the subject of pensions, with many contractors, freelancers, and small business owners who have no kind of savings or private pension at all.

This is pure madness of course, and will ensure that there is an army of freelance workers who are still putting in the hours when they are well past retirement age. It’s unfortunate, but true.

Better education about pensions for self employed is the way forward, and although the government have made a few moves to resolve the issue, more still needs to be done.

Perhaps auto-enrolment pensions could be the way forward for our self employed workers? Maybe, but I think it could be difficult to implement, especially as more and more people are now working for themselves in the freelance, contracting, and gig economy.

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