Self-employed and side hustlers to contribute £125 billion to UK’s economic recovery
A change in the status quo has always given people the inspiration to innovate and start something new. Whether people now have more time or a fresh mindset of ‘there’s no time like the present’, we’ve seen a steady rise in company registrations and people working for themselves over the last year. We may still be in the midst of a third lockdown, but with huge vaccination rollouts and an optimistic look to ‘when this is all over’, we set our sights on how the growing number of self-employed workers and side hustlers across the UK could help the economic recovery.
We recently carried out a survey with YouGov that has shown that small businesses are set to be a key part of the economic recovery for the UK in 2021. Alongside self-employed and side hustlers who are estimated to contribute £125 billion, it’s thought that small and medium-sized businesses will contribute approximately £310.46 billion back into the economy.
In 2019, the Office of National Statistics (ONS) found over 1.1 million people either had two jobs or running their own self-employed business on the side of another job. COVID-19 has only accelerated this and the growth of the self-employed and side hustler movement.
Changes in employment and lifestyles such as furlough and redundancy are pushing more people to work for themselves than ever before. The population of self-employed workers in the UK now sits at over five million, making up 15% of the UK’s workforce.
Our CEO, Marieke Flament commented: “More people are choosing to start or create something of their own more than ever before due to changing lifestyles, personal circumstances, or fulfilling a personal ambition. This research highlights the importance of this growing movement for the UK’s economic recovery in 2021 – particularly amongst the over 55 age group.”
Around 25% of all UK adults now consider themselves to be a side hustler, according to Henley Business School. Having a ‘side hustle’ in addition to a full-time job has for the first time for many, become a necessity to supplement income.
Our research surveyed 2,194 self-employed workers to uncover the role of this segment in boosting the UK economy, the barriers they faced when starting their venture, and the role of banking organisations in helping them thrive. According to the research, the most popular motivations for going solo were
The flexibility and freedom it provided (57%)
The desire for a change in work/life balance (38%)
Wanting more meaning and purpose in their life (24%)
When it comes to those aged 55 and over, we found that they are leading the way in self-employment, with 38% of limited companies and side hustles formed post-March 2020 having been established by that age group.
The rapidly expanding self-employed and liquid workforce movement is being supported by a rise in challenger banking solutions. 83% of respondents who use challenger bank services said they feel supported by them and felt this was because of the ability to do everything virtually, their bank’s ability to get things done quickly (61%) and the fact that their innovative technology and products are more compatible with their business needs (51%).
“The smallest end of the SME market has historically been underserved in terms of business banking, with the majority of incumbent institutions focusing on large commercial customers and corporates. This made it difficult for small business owners to get set up quickly, get paid and tax ready. We champion self-employed workers and side hustlers and are dedicated to building our product to serve them and their needs.” Marieke added.
At Mettle, we want to provide a fast, digital-only account opening experience that’s also personalised and enjoyable. We're always looking at ways to help new customers onboard in the shortest time possible and to see value straight away.
Our customers have always been the focal point for Mettle. So we've released a number of features to help make running your business easier, like putting money aside from your main account with Money Pots, making payments easier with Apple Pay and Google Pay and offering integrations with accounting software like FreeAgent and Xero.
COVID-19 and the challenge of running a business
The COVID-19 pandemic is making the challenge of running a business or side hustle even more difficult. 57% of those surveyed are not looking to expand their business or side hustle or enter a new sector in 2021, with 29% of respondents specifically not looking to expand, citing the UK’s economic uncertainty as the reason why.
“As the UK looks to rebound from the economic damage caused by COVID-19, it’s absolutely vital that this segment has access to the support and services it needs to thrive. Mettle’s position within the NatWest Group means we can help to facilitate this. We leverage the experience and risk knowledge of NatWest, but we also operate like a start-up, so we can move at pace and offer a product that enables self-employed workers and side hustlers to start, run and grow their businesses successfully.’ said Marieke.
Banking doesn’t need to be complex, and we think new small business owners, self-employed workers and side hustlers should be able to rely on their account to help them easily navigate day-to-day processes as they focus on overcoming the macro-economic hurdles outside of their control.”
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2194 adults, who were small business owners (in businesses up to 49 employees) or self-employed. Fieldwork was undertaken between 8th - 19th January 2021. The survey was carried out online.
£125 billion in turnover to the UK’s economic recovery in 2021 estimated using data from the YouGov research on the average turnover of companies, and Mettle data on the size of the sector.