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The Path to prosperity

This research by IPSE and Sherpa sheds light on the financial welfare of the self-employed and the measures to ensure that self-employment is a sustainable, fulfilling and financially rewarding way of life. It examines the defining factors of financial wellbeing for the self-employed, the key financial challenges they face and sets out recommendations to alleviate any long-term financial concerns among them.

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Executive Summary

Money makes the world go round, as the saying goes. It is an indispensable commodity that most of us spend our whole lives working for, and it is also one of the most important determinants of a person’s quality of life. 

For the self-employed, financial wellbeing can be a particularly fraught issue. People who work for themselves on a project-by-project basis often have fluctuating incomes, which can make it difficult to access financial services and government benefits – let alone plan for the future. 

Clearly, even though it is well-established that being your own boss can be extremely rewarding, it is not without its challenges.

Beyond just giving you a little extra dough to enjoy life, financial circumstances can have a significant impact on your wellbeing and mental health. Research has shown that concerns about personal finances can have harmful effects on employees, including losing sleep because of worrying about money, finding it hard to concentrate and make decisions at work, spending time during the working day dealing with money issues, and even having health problems.

Financial circumstances are likely to have a more significant impact on the wellbeing of self-employed people. Working for yourself exposes you to conditions known to generate higher levels of stress, not least because carrying the weight of your business succeeding or failing can be a solitary endeavour. 

There is a lot to think about when you are self-employed. In fact, there are hundreds of extra decisions you have to make every day. So the last thing you need on top of all of that is worries about financial wellbeing. Really, self-employed people need a greater sense of financial well-being to lighten their mental load – so they can enjoy the freedom that should come with working for themselves.

As self-employment in the UK continues to rise, there is growing concern that financial policies and services are out of touch with the realities of the modern labour market and potentially harming the financial wellbeing of the self-employed. To shed light on the situation, IPSE conducted a study exploring the financial wellbeing of the self-employed and what can be done to make this way of working sustainable, fulfilling and financially rewarding for them.

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