Financial News

  • 21 August 2014, 10:19

Self-Employment 'Is A Ticking Time Bomb'

The rise of self-employed workers risks a 'pension ticking time bomb' for blue collar workers, a union has warned.

Construction industry union Ucatt told Sky News of its fears as newly-released official figures show the rising number of self-employed people in the UK.

The Office for National Statistics (ONS) said since early 2008 1.1 million jobs had been created, with two-thirds of those classed as self-employed.

The ONS said in the three months to the end of June, 4.6 million people were self-employed, with the top three jobs blue collar roles.

It said 167,000 were involved in construction and building, 166,000 as taxi drivers and chauffeurs and 144,000 as carpenters and joiners.

It added that the number of self-employed aged 65 and over doubled from 241,000 in 2009 to 428,000 in 2014.

"This is a huge issue for workers because they are falsely labelled self-employed and won't get any pension provision and will retire into poverty," Ucatt general secretary Steve Murphy told Sky News.

"Lots of workers don't even realise they are self-employed because the employer says, 'You are working for me,' so they miss out on sick pay, redundancy, holiday pay and pension entitlements.

"And because of the heavy nature of the industry a lot will have to carry on working into later life, often in foul weather, without any pension provisions - it is a ticking time bomb."

But the Government insists an increasing number of workers want to be their own boss.

A Department of Works and Pension spokesman said: "Employees have driven the majority of the rise in employment since 2010 and today's figures show that the rise in self-employment is mainly due to fewer people leaving self-employment than in the past."

British Chambers of Commerce chief economist David Kern added: "It is wrong to take a dismissive attitude towards self-employment and regard it as hidden unemployment.

"Many people choose to be self-employed and make a considerable contribution to the economy."

The ONS said 35% of self-employed people normally worked 45 hours or more per week in 2014, compared with 23% of employees.

It added that 12% of self-employed people usually work 60 hours or more a week, compared with just 5% of employees.

The ONS also revealed that self-employed people are also more likely than employees to work shorter hours.

In addition to pension concerns, tax, accounting and cash flow are major problems, according to the freelance professionals' body PCG.

It told Sky News: "The single biggest obstacle for those in self-employment is the issue of late-payment.

"There is also a lack of information available for people who have the ambition to strike out on their own and start a business.

"With more people choosing self-employment every day, it is vital that advice is readily available on everything from understanding what tax they need to pay through to registering a business at Companies House."

Advertisement