Contractors and freelancers now earn almost double the national average
- Published on Wednesday, 21 November 2012 11:22
- Posted by Vicki Mitchem
A new study released on National Freelancers Day shows the average self-employed worker has an annual income of £50,820 compared to the national average of £26,093, with self-employed now accounting for 1 in 8 of UK workforce
The average self-employed worker earns almost double the national average salary, according to a new report released on National Freelancers Day, with the number of self-employed workers at a 20 year high of 12.4% of the workforce.
Freelancers contribute more than £202bn to the UK economy which is greater than the financial services sector, and self-employment tax incentives and a recent surge in freelance demand have resulted in a positive increase in freelance pay that dwarfs the national standard annual income.
The findings emerged in a study of 1,000 British self-employed workers which found 70% of the self-driven workforce earn over the UK's average of £26,093, with the typical self-employed salary being more than £50,000 per year.
For a group of workers who earn well above the national wage, it may come as little surprise that 59% of freelancers often work on the weekend with almost 1 in 6 working at least 35 weekends a year. Additionally, 40% of self-employed workers work longer than the average 41 hours per week with 15% putting in more than 51 hours of work.
The average salary differences are particularly surprising given 25% of self-employed workers became contractors as a result of being made redundant.
The report by Boox also shows that three in four will remain freelancing next year, while one in four will either never retire or leave it until they are over 70.
Nearly two in three have pensions, nearly half put up to 10% of earnings in to it, however not all freelancers are financially savvy with one in five admitting they have missed January tax filing deadline and have been fined.
More than one in four leave all tax affairs until the deadline month of January, while more than a quarter have paid too much tax.
According to the UK's freelancing and contracting trade body, PCG, businesses without employees make £202bn worth of sales in 2011 This equates to around 8% of the total turnover for the entire private sector. This equates to circa $333bn and means that, given the GDP of the UK is calculated by the World Bank to be $2.43tr, freelancers (including businesses with no other employees) account for around a seventh of the UK's GDP. To put this in perspective, ONS figures suggest that this £202bn worth of economic activity, equates roughly to the values of the UK construction (£64bn) and manufacturing industries (£140bn) combined. It is also head and shoulders above the £125bn contribution made to the UK economy by the financial services sector.
Leading self-employed average salaries by sector