Earlier this year I wrote about research undertaken by LSE into the impact the Covid pandemic had on the self-employed. The study was part of an ongoing analysis of self-employment during the pandemic, with the latest installment published recently.

The research confirms the previous finding that the pandemic was especially hard for the self-employed, whose incomes have still not recovered from the shock.

Challenging times

The researchers conducted a survey of 1,500 self-employed people, which showed that incomes, and profits, were lower than they were a year ago. Indeed, around a third of respondents said that they were struggling to meet basic expenses, with this especially so for those working in healthcare.

“The current cost-of-living crisis is exacerbating the challenges for self-employed workers, whose incomes and profits have not fully recovered from the pandemic shock,” the researchers explain. “The impact of COVID-19 restrictions has lightened, but recovery has stalled in the face of the high costs of energy and raw materials. These are contributing to the financial difficulties of the self-employed, particularly small businesses.”

Given these difficulties, it should perhaps come as no surprise that around 800,000 people left self-employment during the pandemic. Indeed, of those that stayed the course, over 40% report that their incomes as of April 2022 were less than £1,000 a month. In pre-Covid times, just 27% of self-employed people reported such low income levels.

“While the number of employees in the U.K. has steadily grown and is now above pre-pandemic levels, the numbers in self-employment are lower than they were in 2019,” the authors conclude. “There was an increase in the number of people leaving self-employment during the COVID-19 crisis, but as the economy has picked up, the numbers going into self-employment have remained relatively low.”