Why appetite for risk will define freelancing in 2026

Self-employment has always involved uncertainty, but the balance between risk and reward is shifting in ways that are making the decision harder to justify for many people. Rising costs, weak business confidence and wider economic uncertainty all play a role, alongside a growing sense that the rewards traditionally associated with working for yourself have been steadily eroded. This is reinforced by some policymakers who continue to describe self-employment mainly as insecure work, while treating permanent employment as the safer or more desirable option.

Taken together, these factors are changing how people weigh up whether working for themselves still makes sense. Self-employment remains attractive to many, but greater uncertainty and a weakening sense of reward mean the calculation involved has become more finely balanced than it was in the past.

For many people, working for themselves now comes with a higher degree of financial uncertainty. Gaps between pieces of work are harder to plan around, income feels less predictable, and the consequences of quieter periods are more immediate when day-to-day costs continue to rise. As a result, the risks involved feel more exposed, particularly for those without significant financial buffers.

At the same time, the benefits that once helped offset that risk feel weaker. Autonomy and control over how a business is run remain central motivations, but recent changes have reduced how far those benefits extend in practice.

One important change has been the loss of predictability that many experienced freelancers once relied on. Even with established networks and long-standing client relationships, work is becoming harder to forecast as businesses take a more cautious and short-term approach to commissioning. This has increased uncertainty even for those who have spent years building stable freelance careers.

For company directors in particular, this has been compounded by the steady erosion of dividends, which once provided a degree of flexibility and reward that helped offset periods of uneven income. Successive changes have reduced that buffer, making it harder to manage uncertainty even when work is available.

Alongside this, there has been a gradual loss of the sense that self-employed people are treated as businesses in their own right. When self-employment is repeatedly discussed as a problem to be managed rather than a normal way of working, it affects how viable and valued it feels as a long-term career choice.

These shifts do not remove the appeal of self-employment outright, but they do change how people weigh up the trade-offs involved. As uncertainty grows and the perceived rewards diminish, the decision becomes harder to sustain over time.

Self-employment plays a critical role in how the UK economy functions. It supports flexibility and innovation by allowing businesses to respond to changing demand, access specialist skills and adapt their operations as conditions change. At the same time, it enables millions of people to build careers on their own terms, remain economically active and contribute value in ways that do not fit neatly within traditional employment.

When fewer people feel able to take the risk of self-employment, that flexibility is reduced. Individuals have less freedom to choose self-employment as a long-term career, to decide which roles to take on, or to be selective about clients and projects. At the same time, businesses have fewer practical options to engage skills flexibly and are more likely to default to permanent employment, even where self-employment would otherwise make sense.

This narrowing of choice affects both sides of the economy, limiting how people participate in work and how businesses adapt to changing conditions. At a time when payrolled employment is falling and growth remains weak, that loss of flexibility matters.

Government cannot remove risk from self-employment, nor should it try to. Economic conditions, market demand and individual choices will always shape how viable working for yourself feels. What government can do, however, is address the barriers that are created by policymaking itself.

For businesses, this means creating conditions that make it easier to proceed with commissioning work rather than delaying decisions. Clearer and more stable policy, fewer sudden cost increases, and signals that encourage investment would help firms move out of pause mode and back towards activity. Confidence will also depend on greater clarity around employment status. Where businesses are uncertain about how genuinely self-employed people will be treated, they are more likely to avoid engaging them altogether. Clear and workable rules are essential if firms are to feel confident engaging the self-employed again.

For the self-employed, government has a role in ensuring that working for yourself feels like a legitimate and sustainable option, not a risk taken in spite of the system. Predictability around tax and regulation, proportionate administrative requirements and a clearer recognition of self-employment as a normal way of working would all help people make longer-term decisions with greater confidence.

Taken together, these changes would support an economy that allows people to choose self-employment when it makes sense for them, while giving businesses the confidence to engage skills flexibly. Without that balance, risk continues to rise and participation is likely to fall.

How are uncertainty, changing demand and the way self-employment is treated affecting how you think about working for yourself?

Please use the form below to share your experiences and help ensure the realities of self-employment are properly reflected in policy discussions.