Four out of five self-employed UK workers are in poverty

Nearly four-fifths of self-employed people in the UK are classed as living in poverty, according to a new report.

A person is deemed to live in poverty if they live on £15,000 or less per year, equating to two-thirds of the median level of pay.

According to a report by Tax Research UK, 77% of self-employed workers earn below this amount, and the average income across the board was just £14,655.

The data also showed that the top 1.7% of self-employed earners make 30.7% of the profits made from self-employment. The majority of these earners were lawyers or accountants.

Meanwhile, further figures released last year by the Trade Union Congress (TUC) revealed that the average annual income for self-employed UK women is less than £10,000.

Self-employment has comprised 44% of the new jobs created since 2010, which is thought to have been influenced by reduced labor stability post-recession.

On the whole, entrepreneurs are important for market competitiveness and economic growth, as Alexander S. Kritikos discusses. He notes that increased competition from entrepreneurs challenges existing firms to become more competitive. However, he acknowledges that a high level of self-employment is not necessarily an indicator of entrepreneurial activity, and that policymakers need to streamline economic regulations to allow entrepreneurs to flourish.

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