Executive Summary
- Over two in five women (44%) have been in self-employment for over nine years, proving self-employment offers a long-term career for many women
- Freelance women now comprise almost half (46%) of the freelance workforce
- 15 per cent of freelancers are working mums
Despite our research now revealing a three per cent drop in the number of women in self-employment, the total number of self-employed women now stands at 1,577,000 which is a less sever drop to their male counterparts in self-employment. By comparison, the number of self-employed men in the UK has fallen by seven per cent since 2020.
Interestingly, women enter self-employment optimistically seeking greater control over working hours (63%), choice of where to work (56%) and better work-life balance (55%). Moreover, the largest proportion of the female self-employed work in SOC3 associate professional and technical occupations (23%), accounting for 368,000.
Making the move to work for themselves has proven to be a long-term solution for many women with almost half of self-employed women (46%) being in self-employment for over six years, whilst 44 per cent have been in self-employment for over nine years.
The research also compares self-employed men to women with the research revealing that becoming a mother is more likely to trigger a move into self-employment than becoming a father.
Obstacles for self-employed women
Despite self-employment being a popular route for many women, there are still obstacles including inadequate Maternity Allowance for working mothers, the gender pay gap and a reduced accessibility to training. These are barriers which may deter many women from entering self-employment. The pandemic also had an effect on this, with the amount of working mothers decreasing by 14 per cent since 2020 due to freelance mothers having to contend with lockdown restrictions and its impact on childcare.
A range of ages
Whilst the average age of women in self-employment is 47 years-old, the largest age groups for self-employed females are 50-59 years (424,000) and 40-49 years (379,000). Combined, this accounts for over half of the whole female solo self-employed population.
The age group that has seen the largest increase amongst the female self-employed population is the 30-39 age band, which has seen an increase of eight per cent since 2020.
Introduction
We know from previous research that the flexibility and control provided by freelancing continues to attract women into self-employment.1 Similarly, IPSE research has revealed that becoming a mother is more likely to trigger a move into self-employment than becoming a father.2
We also know that women enter self-employment for overwhelmingly positive reasons, seeking greater control over working hours (63%), choice of where to work (56%) and better work-life balance (55%).3
On the one hand, the female employment rate in the UK reached a record high 72.7 per cent in December 2019-February 2020. For reference, this has risen from 52.8 per cent in 1971 when comparable records began.4
On the other hand, we also know that the female employment rate has fallen since the onset of the pandemic – falling to 71.4 per cent at the height of the pandemic and lockdown restrictions (November 2020-January 2021).
Whilst self-employment remains a popular occupational route for many women, this is in concert with challenges such as inadequate Maternity Allowance, the gender pay gap and inadequate access to training.
This report will outline the size of the female self-employed sector, review demographic and occupational changes since 2020 whilst also reviewing the motivations and experiences of women in self-employment. The report will then conclude with a series of policy recommendations for government.
The number of solo self-employed women in the UK has increased by 59 per cent since 2008, with the overall solo self-employed population now 39 per cent female and 61 per cent male.
After IPSE research in 2020 revealed that there had been a one per cent drop in the number of solo self-employed women between 2019 and 20205, our research for 2021 revealed a three per cent drop in the number of women in self-employment.
The number of solo self-employed women in the UK now stands at 1,577,000.
By comparison, the number of solo self-employed men in the UK has fallen by seven per cent since 2020.
Freelance women (those operating in the top three highest-skilled Standard Occupational Categories) now comprise 46 per cent of the freelance workforce after a less severe fall in numbers compared to men during the pandemic. Although the number of highly skilled freelance women has fallen by six per cent since 2020 – equivalent to 58,000 individuals – the number of male freelancers has fallen by 14 per cent in the same period – equivalent to 169,000 individuals.
Now looking at working mothers in self-employment, our research reveals that the total number of solo self-employed mothers has decreased by nine per cent since 2020. Despite this, the number of working mothers in self-employment has still increased by 40 per cent since 2008.
Solo self-employed mothers now account for 13 per cent of all solo self-employed people, with the number of solo self-employed mothers now standing at 533,000.
In addition, the number of freelance mothers in the UK (those operating in the top three highest-skilled Standard Occupational Categories) now stands at 276,000, accounting for 15 per cent of the total freelancer population. This represents a decrease of 14 per cent since 2020, with freelance mothers having to contend with lockdown restrictions and its impact on childcare.
The average age of women in self-employment is 47 years which is slightly lower than the average age of men in self-employment (48 years) and the same as the overall self-employed population (47 years).
The largest age groups for women in self-employment are 50-59 years (424,000) and 40-49 years (379,000). When taken together, these two groups account for over half the whole female solo self-employed population (51%).
The age group that has seen the highest increase amongst the female solo self-employed population is the 30-39 age band have experienced an increase of eight per cent since 2020 – equivalent to 26,000 individuals.
In addition, the 60+ age band have also experienced an increase of eight per cent since 2020 – equivalent to 23,000 individuals.
The largest proportion of the female self-employed work in SOC3 associate professional and technical occupations (23%), accounting for 368,000 individuals.
A further 22 per cent operate in SOC2 professional occupations (340,000) whilst 18 per cent work in SOC6 caring, leisure and other service occupations (286,000).
A total of 53 per cent of the female self-employed population are concentrated in the three most highly skilled occupational categories (SOCs 1-3).6
Overall, the majority of female freelancers operate in the top three highest-skilled occupational categories.
Interestingly, almost half of self-employed women (46%) have been in self-employment for over six years whilst 44 per cent have been in self-employment for over nine years – proving that self-employment offers a long-term career for many women.
A quarter (25%) have been self-employed for more than four years but less than eight years.
A further 37 per cent of self-employed women have entered self-employment since 2018.
Overall, the flexibility and control afforded by self-employment offers a long-term career for many women.
Laura Wallis is a self-employed mother of one whose career has focused on expert training design and delivery in the youth and mental health landscapes. She has worked on contracts with the NHS, several large universities and large, academic conference organisers. She is now working as a freelance writer and speaker with expertise in women's healthcare, neurodiversity and mental health. In the future she hopes to add environmental sustainability and another child into the mix.
"I started building my own self-employed career in 2018 when I left a career in the NHS to build and grow an organisation called 'Debating Mental Health', which delivered speech and debate coaching to young people with mental health support needs, as a means of improving their confidence and self-esteem. At the time I didn't have children, but my husband and I knew it was on the horizon and knew that we could neither afford, nor wished to pay for regular childcare and that we would prefer if one of us could be available to look after our family. That same year, I also received two life-changing diagnoses of endometriosis and ADHD.
I had been looking, unsuccessfully, for a new job for a while and when my husband and I gave it more thought, in light of my health news and our plans to have a family, self-employment felt like the right step for me to take. Initially, with 'Debating Mental Health', I wasn't stepping too far away from had I had been doing in the NHS, so the leap didn't feel huge. I am now shifting my focus to include more writing and public speaking, but have now learnt the skills required to be successful in self-employment, so a step in a new direction feels manageable.
Self-employment has enabled me to explore my passions in a way that traditional employment never did and I have really valued the ability to work on projects that I care deeply about. I have also found that self-employment has enabled me to pursue project across different specialist areas more easily than I think I would have managed in traditional employment.
My husband is a shift worker, so for us, my being self-employed makes sense. I do a lot of work around his shift patterns, meaning that we always have someone at home with our little one and we don't need to pay expensive childcare fees. I also really value that, as someone with a chronic illness, I am better able to manage my time and energy and do lots of my work at times that I know I can be more productive, or to take things a little slower if my health requires it."
Conclusion
There are lots of reasons for women choosing to go into self-employment. Many see it as an opportunity to continue work that they have been doing for years, just with more freedom and flexibility. Our research revealed a three per cent drop in the number of women in self-employment in 2021, suggesting the pandemic could have been challenging for many women working for themselves. Despite this, freelance women now comprise 46 per cent of the freelance workforce after a less severe fall in numbers compared to men in the pandemic.
Freelancing is a particularly attractive option for working mothers seeking solutions to expensive childcare fees and in the UK, we currently have 276,000 working mums (15 per cent of freelancers). Whilst we are unsure how the statistics will continue to develop; it is encouraging to see that women feel that they have options and don’t necessarily have to choose between motherhood and work. This correlates with the age group that has seen the highest increase amongst the female solo self-employed population: 30–39-year-olds have experienced an increase of 26,000 individuals.
With women now making up a significant proportion of the self-employed sector, government should reform maternity allowance, invest in low-cost childcare and extend Statutory Sick Pay to the self-employed in order to embrace this thriving sector.
Policy Recommendations
- Bring maternity allowance for self-employed mothers closer in line with Statutory Maternity Pay. The current system for Maternity Allowance unfairly results in self-employed mothers receiving less than employee counterparts in the same situation.
Presently, employed mothers receive 90 per cent of their average weekly earnings (before tax) for the first six weeks whereas self-employed mothers are unable to benefit from this initial payment.
Government should extend this initial six-week payment of 90 per cent average weekly earnings to self-employed mothers and in doing so, bring maternity allowance closer in line with Statutory Maternity Pay.
- Statutory Sick Pay should be extended to the self-employed and reformed to exclude an earnings threshold. The pandemic highlighted the reality that freelancers are often forced to choose between their health and an income with previous IPSE research revealing that 58 per cent of freelancers are in favour of being entitled to some form of sick pay.
We know that women and insecure workers are more likely to fall into debt when ill due to caring responsibilities or part-time work. If the government is serious about supporting women in self-employment, it must make the choice between health and income a thing of the past for all forms of employment, including those who work for themselves. It should do this by extending Statutory Sick Pay protections to sole traders, enabling them to claim a proportion of average earnings should their income decline due to short term illness.
The current earnings threshold within Statutory Sick Pay would also need to be reformed to allow for part-time workers to be able to make use of the benefit.
- Government should invest in low-cost childcare. Research from the Women’s Budget Group shows that childcare costs for a nursery place for a child under three absorbs 60 per cent of part-time women’s annual salaries.
The way childcare is structured also excludes those in a-typical shift work which particularly impacts on women who are often forced out of work as a result of caring responsibilities.
The current childcare system is increasingly oversubscribed and unaffordable for working parents and it is clear that government must prioritise widescale investment in low-cost childcare.