Report: 450,000 recently 'self-employed' Brits would rather just have a normal job

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Hundreds of thousands of people are being forced to register as self-employed after failing to find jobs elsewhere, new research has discovered.

Figures today are expected to show another fall in the overall unemployment rate, which has dropped by more than 300,000 since the end of 2011.

In a further fillip for the Coalition, separate statistics are likely to reveal that wage rises have finally overtaken inflation for the first time in four years.

Part of the explanation of the downward trend in unemployment has been a steady rise in the number of people becoming self-employed since the economic downturn.

However, a survey by the Resolution Foundation suggests that many previously jobless people have opted to work for themselves because they have no alternative.

The number of people in employment in Britain has risen to just over 30 million, of whom 4.5 million are registered as self-employed.

A Ipsos Mori survey for the think-tank found that more one quarter (28 per cent) of people declaring themselves self-employed over the last five years would prefer to be employees, a far higher proportion than among people who have self-employed for a longer period.

That is equivalent to more than 450,000 of the 1.7 million people who have become self-employed in the last five years.

27 per cent said they had become self-employed because of a lack of an alternative.

The survey also revealed that 44 per cent of the new self-employed in lower skilled occupations would rather be an employee, double the proportion (21 per cent) of the more highly skilled.

The foundation said its analysis suggested that for a growing minority self-employment was “increasingly less of a choice and more of a fall-back”.

Conor D’Arcy, a researcher at the think-tank, said: “The UK has had impressive employment growth over recent months, a sizable proportion of which has been driven by an explosion in self-employment. That’s why it’s vital we know more about these new self-employed workers.

“Some will see themselves as entrepreneurs and revel in setting up their own business - the clear majority still prefer to be their own boss.

“But a considerable minority appear to be there unwillingly or at least would prefer the security of being an employee given the choice. The new face of self-employment is more likely to be female and looking for an alternative compared with their more established counterparts.”

The research also raised concerns about the challenges facing the newly self-employed in getting credit and finding accommodation housing.

One in four (24 per cent) said they had been blocked from obtaining personal credit or loans due to being self-employed, while 12 per cent said their status had prevented them getting a tenancy.