Young people have been warned about a gap between expectations and reality when it comes to self-employment after data showed one in five anticipated being self-employed in the future.
The Young People in Self-Employment survey from the Office for National Statistics, found one in five (22 per cent) 16 to 21-year-olds believed they would be self-employed at some point in the future.
The body had analysed a range of employment data between 2006 and 2018 comprising around 19,000 UK households.
It found while family time and a high income were named as top motivating factors for wanting to work for themselves, in reality young self-employed people often earned £4,000 less than those employed and worked longer hours.
According to the data, around one in 10 (9 per cent) of 22 to 30-year-olds were self-employed after leaving education in 2018, with an average gross pay of £16,700, compared to £20,500 for employees of the same age.
This trend had increased from 2006, when the self-employed in this age bracket earned £21,200 on average, compared to £22,700 for employees.
In addition, almost a third (31.9 per cent) of self-employed 22 to 30-year-olds tended to work 45 hours-plus a week, according to the 2018 data, compared to 9.2 per cent of employees in the same age group.
The survey also showed men aged 22 to 30 were twice as likely as women to work for themselves (12 per cent compared with 6 per cent), largely explained by the male-dominated industries in which self-employment is most common, such as construction.
Ian Browne, pensions expert at Quilter, warned those setting down this alternative career path had a number of financial factors to consider.
He said: “It’s not just the salary that is impacted by self-employment. They [the self-employed] do not receive benefits, such as a pension, that their employed peers will.
"Not only that, but it can also be much harder to get a mortgage as banks become wary of lending to someone who does not necessarily have secure employment.
“Self-employment will be an excellent choice for some, but it is important they do their research and reach out for support before they start out, whether that is from family and friends, or from a professional."
