Female self-employed

According to the Office for National Statistics’ recently-released Personal Income Statistics 2011/12 (PDF) study, the gender pay gap between self-employed men and women is a massive 40%. Self-employed men earn on average £17,000 per year, whereas self-employed women take home just £9,800. The disparity was most pronounced in London, where men took home more than double their female counterparts.

Research released separately by the ONS (PDF) in December showed that the gender pay gap widened in 2012 – the first time male earnings have outgrown that of females in five years.

Although self-employment has seen explosive growth in recent years, many economists are speculating that this growth is attributable to workers failing to find full-time positions, and having no option but to start freelancing.

General secretary of the TUC Frances O’Grady, told the Guardian:

“It would be naive to think that all these workers are really budding entrepreneurs. These figures instead suggest that many employee roles are being replaced by self-employed positions. Bogus self-employment is bad news for workers because they miss out on vital rights at work – such as paid holidays and employer pension contributions – without having the advantage of being their own boss.”

Many full-time freelancers and contractors may be surprised by the low average earnings. Our own research last year found the average full-time freelancer was earning £76,800 before tax – more than four times the figure published by the ONS. Part-time freelancers are the reason for this disparity – many full-time employees pick up freelance work on the side and record it as self-employed income on their Self Assessment, dragging down the average across all self-employed earnings.

Photo by Victor1558