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- 25 Sep 2020
Since 2008, the rise in self-employment has been driven by a 69 per cent increase in the number of female freelancers working in the most highly skilled occupations and choosing this way of work because of the freedom, flexibility and control it provides.
The number of freelance working mothers has also increased by 79 per cent since 2008. Freelancing allows mothers to pursue their career and spend time with their family in a way that simply was not possible half a century ago.
It seems that the vast majority of these women entered self-employment for overwhelmingly positive reasons. Among the most significant are greater control over working hours (63% of women said this was a factor), choice of where to work (56%) and better work-life balance (55%) – all features that could be particularly appealing to new mothers.
In line with these findings, IPSE’s report, Women in Self-Employment: Understanding the Female Self-Employed Community, found that becoming a mother is more likely to trigger the move into self-employment than becoming a father.
However, it also showed that self-employment doesn’t come without its challenges, and that is no different for self-employed working mothers.
Some of the greatest challenges for self-employed mothers are parental leave and pay.
Previous IPSE research revealed that existing parental leave policies do not reflect the needs of the self-employed, who are currently not eligible for Maternity or Paternity pay – or Shared Parental Leave (SPL). Self-employed mothers can only claim Maternity Allowance which entitles them to £151.20 per week or 90 per cent of their average weekly earnings – whichever is less.
The low value of the Maternity Allowance combined with the 43 per cent gender pay gap found in self-employment can help explain why many self-employed mothers don’t take enough maternity leave to bond with their children but choose to continue to work instead.
In fact, IPSE’s research found that only a third (33%) of self-employed women have claimed Maternity Allowance for the full 39 weeks it is available to them, while another third (30%) have not claimed their Maternity Allowance at all.
The data also showed that another key reason self-employed women do not feel able to take all their maternity leave is that they fear the damage it could do to their businesses.
In fact, 42 per cent of self-employed mothers took six months or less of maternity leave and eight per cent took no time at all, with many returning to work early for career or financial reasons. A quarter (25%) also say they need more than the statutory ten Keeping In Touch (KIT) days allowed by the Department for Work and Pensions to maintain their business.
These struggles were also highlighted by Kathryn Dooney, a self-employed mother and freelance social media manager, who was quoted in the report: “It largely comes down to purely financial issues and whether you can afford to take the full period of the Maternity Allowance and manage on the amount they offer you. I‘ve been talking to other women in the freelance world – they definitely couldn’t manage on just the Maternity Allowance, it was a large drop in earnings for them.”
The research illustrated that self-employed mothers have particular concerns, face unique challenges and need tailored support to meet their needs and help them to make a success out of self-employment.
To enable this, IPSE put forward a set of recommendations on what can be done to help mothers develop their potential in self-employment and live a comfortable and financially rewarding life while working in this way.
Since for many the Maternity Allowance represents a huge drop in earnings, introducing Statutory Maternity Pay for self-employed mothers will give them a better opportunity to bond with their children, while also staying financially afloat.
Extending the SPL to the self-employed could also allow parents to have equal opportunities to care for their children – at the same time as building their own businesses. A scheme like the SPL could be well suited to the flexible working style self-employed people have and extending it to them could also help increase the uptake of the scheme which is as low as two per cent of all eligible couples.
More broadly, however, there should be a dedicated review of parental rights and pay for the self-employed. This review could take a fresh approach to how parental policies and pay can be made more flexible to meet the needs of the UK’s five million self-employed, and not simply seek to fit freelancers into the existing system designed for employees.
Chloé Jepps, Head of Research at IPSE, said: “The record rise in self-employment in the last ten years has been largely driven by the rise in the number of highly skilled female freelancers. More and more mothers also choose self-employment as a way to pursue a career that allows them the flexibility to spend time with their family.
“Introducing Statutory Maternity Pay for self-employed mothers and extending Shared Parental Leave to self-employed parents will allow this ever-growing sector of the UK labour force to live a financially rewarding life.”
Find out more about IPSE’s research work here.
IPSE's Andy Chamberlain outlines why we have written to the Chancellor this week calling for a 'focused, flexible and fair' approach to coronavirus support for the self-employed.