Self employed numbers up, but income in long-term decline

A new report looking at the fortunes of self-employed people suggests one possible reason why, despite improvements in the national economy, many people are still struggling.

The study shows that over the past 12 years, the income of someone who was self-employed and earning less than £100k had dropped by 31 per cent.   And the total amount of self-employed earnings as a percentage of our Gross Domestic Product has dropped from almost 11 per cent to almost 8.5 per cent, despite a rise in the number of self-employed people.

The impact of this drop in income will have been worsened by inflation.

The report, by tax expert Richard Murphy and funded by the Joseph Rowntree Charitable Trust, said that those earning more than £150,000 have fared better and increased their incomes significantly over the same period.

Recent figures from the Office for National Statistics said that the number of self-employed people rose by 367,000 between 2008 and 2012. Sixty per cent of that increase happened between 2011 and 2012 – and 84% of that increase was for those aged 50 and above.

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