Aegon: ONS figures show sharp fall in self-employment during the pandemic

by | Jul 6, 2022

Share this article

  • Official figures show sharp falls in self-employment during the coronavirus pandemic from a peak of 5 million at the end of 2019 down to 4.2 million in early 2022.
  • Movement of workers from self-employment into the ‘employer’ workplace will mean more people benefit from auto-enrolment pension savings.
  • However, much more work is needed to improve the pensions savings gap among the over 4.2 million self-employed currently excluded from auto-enrolment.

 Kate Smith, Head of Pensions at Aegon comments: “The ONS analysis highlights a dramatic fall in the number of self-employed since the onset of the coronavirus pandemic, similar to what was experienced during the financial crisis in 2008. And while there has been a slight increase in levels since the turn of this year, the number of those self-employed remains significantly lower than its pre-pandemic peak of 5 million people, which stood at 15.3% of the labour market.     

 “The biggest movement out of self-employment during the coronavirus pandemic was driven by flows into ‘employee’ status. Some of these workers have reclassified their employment status from self-employed to employee, prompted by the furlough scheme and delayed changes to off-paywall working rules (IR35), while others have moved and changed jobs.

“The good news for all eligible employees moving out of self-employment into the workplace is that they will benefit from saving into their employer’s pension scheme, a benefit they were previously excluded from. Once auto-enrolled, they will receive an employer contribution alongside their own pension contribution and government tax relief. This will provide a major boost to their retirement savings.


 “However, despite the sharp fall over the last two years, over 4.2 million people remain in self-employment, with many of these not saving for retirement as they are excluded from auto-enrolment. Being excluding from auto-enrolment, the self-employed find themselves at a significant disadvantage when it comes to pension saving and progress in government policy is needed to ensure these people are supported.

 “Pensions Minister, Guy Opperman, confirmed the government is on track to implement the 2017 auto-enrolment reforms by mid-2020s and we hope this also includes implementing a pension solution for the self-employed. We hope that the current changes in government won’t derail progress in this implementation date, although the fall-out from first Brexit, then the pandemic and also the current cost-of-living crisis may make this increasingly difficult to sell across Government.”

Share this article

Related articles

Winners of the Protection Guru Awards 2022 are announced

Winners of the Protection Guru Awards 2022 are announced

Protection Guru, has today announced the winners of Protection Guru Awards 2022. In this, their second year, the awards have been established to recognise the leading lights of the protection industry. The team at IFA Magazine extends our congratulations to all this...

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, designed to fit perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode