Making Financial Sense of Self-Employment



Anyone who has ever launched a business, been an owner, or worked as a self-employed contractor knows how hard it can be to stay on top of all the details. From finding enough work to balancing business finances, and everything in between; self-employed workers face a different set of responsibilities than people with conventional jobs.

If you are self-employed as an independent contractor, filling a specific role in your industry, it’s not like working for a company. And if you are “the company”, life gets even more complicated. For starters, there are financial matters to attend to, which go above and beyond your personal finances. In fact, the two are closely linked, so self-employment requires skill managing money both at home and during business hours.

Challenges of Being Self-Employed

The ‘gig’ economy is a reality for countless freelancers, developers, artists, contractors, consultants and other skilled workers without steady employment. The trend is gaining momentum, more than it is losing steam, so an increasing number of UK workers are learning financial strategies for self-employment.

Growing levels of independent employment may lead uninitiated observers to think these workers have unlimited freedoms. In reality, self-employment is tentative and insecure for many workers, struggling to achieve basic employment benefits. Not only are they subject to unfair dismissal, without the same redundancy protection other workers have, but self-employed people also sacrifice holiday pay, sick days, and other workplace benefits.

Entrepreneurs and contractors are not locked-in to the same work roles day after day, giving some people the wrong impression about self-employment. It’s true some business owners find success and riches. But many struggle to become and remain profitable. With lagging incomes, UK’s self-employed residents often find it difficult to contribute to pensions. The uncertainty adds another layer of financial insecurity to this form of employment, risking retirement poverty for self-employed workers that are unable to save enough money for a comfortable retirement.

Finding Financial Relief

The inequities facing self-employed workers are getting increased attention as more and more Britons earn a living independently. Companies such as Uber and Deliveroo are reliant on contract workers, so the companies have spoken out in favour of reforms, supporting more rights for self-employed workers. According to company representatives, current labor laws stand in the way of extending benefits like insurance cover and pensions. Giving workers these benefits under the current system would automatically classify them as employees, making the companies liable for national insurance payments and other costly benefits. One recommendation is to allow flexible part-time drivers to operate much like they do today, while creating another category for the ones who depend upon the driving jobs as a primary source of income. These workers would be eligible for some employer-funded benefits.

Self-employment income can be irregular, reflecting busy peak times and periods when work flow slows. Shortfalls are often unexpected, leaving contractors and other self-employed workers with short-term money problems. Fortunately, various funding sources furnish fast financial solutions, including loans available here, without a credit check. These vital resources can help smooth-out irregular cash flow, softening the impact of self-employment slowdowns.

Proposals for finding financial relief in the gig economy include reforms such as a form of automatic pension enrollment, which would help the new generation of self-employed workers prepare for retirement. Some think these “dependent contractors” would also benefit from creating flexible account terms, allowing self-employed Britons to access their retirement savings prior to reaching age 55.

Until favorable changes to labour laws recognize the expanded role of self-employment in the modern economy, this steadily growing class of workers remains vulnerable. In the meantime, it is up to independent contractors, freelancers, designers, consultants, entrepreneurs, couriers, taxi drivers, content providers and countless other Britons to balance the benefits of self-employment in an unsympathetic environment.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK’s most well-known financial institutions.


An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!


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