Self-employment has long been seen as a route to independence, flexibility and entrepreneurial freedom. But recent data and expert analysis suggest that the picture is becoming more complex, with some people leaving self-employment or reconsidering it due to economic pressures, changing labour market conditions and evolving personal priorities.
What the numbers tell us
Official UK statistics indicate that there are still millions of self-employed people, with around 4.4 million individuals recorded as self-employed as of late 2025. This figure includes freelancers and sole traders and highlights the continuing importance of self-employment within the labour market.
However, the long-term trend is not simply one of unbroken growth. Corrections to earlier data have shown that the size of the self-employed population was previously overstated and that growth has been more modest than once thought. In particular, survey and tax data suggest that net changes in self-employment have slowed since the pandemic, with some flows out of self-employment as workers take up employee roles or move into other labour market statuses.
Indeed, some analyses imply that the number of sole traders a core form of self-employment—has declined in recent years, while incorporated business numbers have grown. This suggests shifting preferences in how people operate their businesses rather than a straight increase in traditional self-employment. :
Why some are reconsidering self-employment
Economic pressures are a major factor influencing attitudes toward self-employment. Research from IPSE has highlighted that around a quarter of freelancers were considering leaving self-employment within the next 12 months due to cost-of-living pressures and financial uncertainty.
In addition, trends in hybrid work and side hustles show that many workers now combine self-employment with traditional employment, possibly in search of greater stability or benefits. Nearly one in five freelancers report working on a self-employed basis while remaining employed.
Profitability is another challenge. Analysis from the Institute for Fiscal Studies suggests that earnings for many sole traders have fallen considerably in real terms over the past decade, meaning lower incomes despite continued business activity.
The appeal of self-employment hasn’t disappeared entirely
Despite pressures, self-employment remains attractive for many people. The sector still makes up a significant part of the workforce, with freelancers accounting for a large percentage of those working for themselves.
Motivations for choosing self-employment vary. Some people value the autonomy and flexibility it offers, while others take it up as a way to build a business or pursue a passion. Research has found that people often enter self-employment for a mix of lifestyle, opportunity and necessity reasons.
Interestingly, the self-employed landscape is not uniform: trends differ by age, sector and individual circumstances. Older workers, for example, have increasingly used self-employment as a way to stay active and supplement retirement income.
Is self-employment being “given up on”?
While there are signs that some self-employed workers are reconsidering their status, especially those struggling with economic pressures or seeking greater security, the evidence does not yet show a mass exodus from self-employment. Rather, what we see is a more nuanced shift: some move into employee roles, some adjust their business model, and others balance self-employment with other work.
Long-term trends in self-employment are shaped by broader labour market dynamics, including changes in job quality, taxation, social protection, and remote working patterns. Policies that affect tax treatment, access to benefits and business support also influence individual decisions about whether to stay self-employed or return to traditional employment.
The future of self-employment
Going forward, the future of self-employment will likely be determined by how well labour markets and economic conditions support people who work for themselves. Many self-employed individuals continue to contribute significantly to the economy, but the pressures they face—especially during economic downturns—highlight the need for policies that balance flexibility with security.
For now, self-employment remains a vital but evolving part of the labour market, shaped by both opportunity and challenge rather than being universally abandoned.