On the edge: low income self-employment in Wales

Bevan Foundation report reveals the financial vulnerability of people in low-income and insecure self-employment

Self-employment in Wales risen in the past twenty years. This matters, as more people have come to rely on self-employment for an income. The number of self-employed people now exceeds the entire number of workforce jobs in Welsh manufacturing and almost as many as people working in retail. 

While lucrative for some, there are also very many self-employed people who experience financial vulnerability.  Median incomes from self-employment are around two thirds of that from employment.

The Bevan Foundation’s latest report explores what impact low-income and insecure self-employment has on financial well-being, including the ability to plan for their future, make provision for retirement and to withstand changes such as unexpected costs, a sudden drop in earnings or change in circumstances. Amongst the report’s key findings are:

• There are self-employed people in real financial hardship who are sometimes unable to keep up with payments, forced to cut back, resort to borrowing and get into debt.
• Low income self-employment also has the effect of limiting someone’s ability to build up a financial buffer for unexpected costs and make provision for old age and retirement.
• The financial vulnerability of self-employed people who are the sole earners in their households is particularly acute and the pressure to support and maintain a household is greater.

While many self-employed people trade-off some financial well-being for wider well-being, this should not be a cause for the issue to be overlooked. A thriving and fair economy is one where work pays and where everyone has a minimum level of financial well-being and resilience, no matter what their employment status.

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