• The number of disabled self-employed workers has risen by 39 per cent since 2013 to 650,000 individuals.
• The age group that has seen the highest increase amongst the solo self-employed disabled is the 16-29 age band, experiencing an increase of 29 per cent since 2020.

• Almost half (49%) of disabled people (49%) have been self-employed for over 8 years.

   

Our review of the disabled self-employed sector in 2022 reveals that the number of disabled self-employed workers has risen by 39 per cent since 2013 to 650,000 individuals. For context, this represents a seven per cent increase since last year.

When analysing the demographics of the disabled self-employed, the report found that there are more men (58%) than women (42%). Moreover, the average age of the disabled self-employed is 51 years which is slightly higher than the average age of disabled employees (43 years) and the overall self-employed population (47 years).

Interestingly, the age group that has seen the highest increase amongst the solo self-employed disabled is the 16-29 age band, experiencing an increase of 29 per cent since 2020 (equivalent to 13,000 individuals).

The report also found that the largest proportion of the disabled self-employed work in SOC5 skilled trades occupations (24%), accounting for 156,000 individuals. This is followed by SOC2 professional occupations (107,000) and SOC3 associate professional and technical occupations (105,000).

Moreover, the report looked at the average amount of time that disabled people operate as a self-employed individual. Almost half (49%) of disabled people (49%) have been self-employed for over 8 years. This is followed by a quarter (28%) who have been self-employed for more than four years and a further quarter (28%) who have entered self-employment since 2018.

Previous IPSE research has revealed that disabled people enter self-employment for overwhelmingly positive reasons, with 21 per cent of disabled people reporting that they made the move into self-employment for better work or job satisfaction.1

We know from parliamentary evidence that freelancing enables people to work around their conditions or impairments whereas employment is sometimes considered inflexible and unsupportive with disabled people facing attitudinal barriers in employment.2

Similarly, research has also revealed that the pandemic has had a disproportionate impact on disabled people, with the disabled more likely than their peers to experience higher levels of financial stress and reduced hours as result of lockdown restrictions.3

Concerningly, since the onset of the pandemic in 2020, the disability employment rate gap has widened, with median pay for disabled men 12.4 per cent less than non-disabled men and median pay for disabled women 10.5 per cent less than non-disabled women.4

In addition, we also know that the unemployment rate for disabled people remains significantly higher than for those without disabilities (8.4% compared to 4.6% respectively).5

This report will outline the size of the disabled self-employed sector, demographic and occupational changes since 2020 whilst also reviewing the motivations and experiences of the disabled self-employed before concluding with a series of policy recommendations for government. As part of the research project, we also interviewed the disabled self-employed in two focus groups chaired by IPSE and Disability Rights UK where disabled freelancers shared their experiences of self-employment. Through this focus group, we reviewed their motivations for entering self-employment, the advantages provided by the flexibility and control offered by self-employment but also the challenges specific to their disability as a result of operating in this way.

The number of solo self-employed disabled people in the UK has increased by 39 per cent since 2013.

After IPSE research in 2020 revealed that there had been an eight per cent drop in the number of self-employed disabled people between 2019 and 20201, our research for 2021 revealed a seven per cent increase in the number of solo self-employed disabled between 2020 and 2021.7

The number of solo self-employed people in the UK now considered disabled under the Equality Act stands at 650,000.8

This compares to 4.4 million disabled people in employment in 2021 and 8.4 million people of working age (16-64) reporting that they were considered disabled under the Equality Act in the UK.9

In conclusion, overall numbers of the solo self-employed have now recovered from the decrease reported between 2019 and 2020.

“Self-employment provides me with the flexibility to work with multiple clients whilst also allowing me to manage my disability.”

Disabled freelancer participating in a focus group with IPSE and Disability Rights UK

There are more disabled men (58%) than women (42%) in self-employment. Disabled employees, on the other hand, comprise 41 per cent of men and 59 per cent of women.

The number of men operating as a self-employed individual and disabled has increased by 12 per cent between 2020 and 2021 (equivalent to 40,000 individuals) compared to a one per cent increase in the number of females (equivalent to 2,000 individuals).

Overall, the number of male self-employed disabled has increased by 21 per cent since 2013 whilst the number of female self-employed disabled has increased by 73 per cent between 2013 and 2021.

In comparison, the number of male disabled employees has increased by 45 per cent since 2013 and the number of female disabled employees has increased by 69 per cent.

“Self-employment allows me to effectively work around my disability. Employed roles often felt rigid which hindered the quality of my work.”

Disabled freelancer participating in a focus group with IPSE and Disability Rights UK

The average age of the disabled self-employed is 51 years which is slightly higher than the average age of disabled employees (43 years) and the overall self-employed population (47 years).

The age group that has seen the highest increase amongst the solo self-employed disabled is the 16-29 age band, experiencing an increase of 29 per cent since 2020 (equivalent to 13,000 individuals).

Overall, there has been a significant increase in the number of young disabled individuals operating as self-employed in the UK as self-employment becomes a more attractive career option for younger disabled freelancers.

“I’ve often felt the offices of clients to be quite inaccessible with the amenities difficult to access. The journey can also be tricky.”

Disabled freelancer participating in a focus group with IPSE and Disability Rights UK

The largest proportion of the disabled self-employed work in SOC5 skilled trades occupations (24%), accounting for 156,000 individuals.

A further 16 per cent operate in SOC2 professional occupations (107,000) and a further 16 per cent in SOC3 associate professional and technical occupations (105,000).

A total of 40 per cent of the disabled self-employed population are concentrated in the three most highly skilled occupational categories (SOCs 1-3).10

Overall, the majority of the disabled self-employed work in skilled trades occupations whilst almost half of the disabled self-employed population operate within the top three most highly skilled occupational categories.

“Uncertainty around income can be particularly concerning when self-employed and disabled. Greater support from government is required if we want to improve access to self-employment for the disabled.”

Disabled freelancer participating in a focus group with IPSE and Disability Rights UK

Interestingly, almost half of disabled people (49%) have been in self-employment for over 8 years, with 39 per cent starting their career in self-employment prior to 2010 and proving that self-employment offers a long-term career for many disabled individuals.

Over a quarter (28%) have been self-employed for more than four years but less than eight years.

A further 28 per cent of disabled self-employed have entered self-employment since 2018.

Disabled people are a vital and growing part of the self-employed community. In fact, their numbers have risen by 39 per cent in the last nine years alone. They now make up a considerable amount of the total self-employed workforce, and this impressive growth is only set to rise post-pandemic.

The disabled self-employed are part of an already diverse and thriving sector, and their varied perspectives and lived experiences do much to enrich the professions they work in.

However, despite their valued contributions, many lack the benefits and support they need to thrive in self-employment. Being self-employed can affect the ability to claim benefits or access to work schemes, and thousands of disabled freelancers have been left without crucial supportive measures like Industrial Injuries Disablement Benefit. We are therefore calling for changes to make self-employment work for disabled people.

We want the government to allow disabled self-employed workers access to Industrial Injuries Disablement Benefit and to re-design the Work Capability Assessment to make the process more accessible. Furthermore, the government should reform Universal Credit by extending the start-up period and permanently suspending the Minimum Income Floor.

Furthermore, government should expand the current adjustment passports trials for those wishing to enter self-employment whilst also expanding and promoting its Access to Work scheme which offers vital support to disabled workers.

If the government doesn’t enact these measures, we believe that it will have damaged one of the leading lights in the self-employed community. It will have also hurt the livelihoods of thousands of disabled people, who have embraced the freedom and dynamism of self-employment.

• Expand access to Industrial Injuries Disablement Benefit to the self-employed. As a self-employed individual, a debilitating injury can cause considerable financial hardships, especially when you have to rely on yourself to earn a living and cover bills.

Having to rely on savings to cover basic living costs - which are now exponentially rising due to the current cost of living crisis – places significant financial strain on these self-employed individuals who have suffered a debilitating injury through no fault of their own.

Currently, the Industrial Injuries Disablement Benefit (IIDB) is accessible to employees who become ill or are disabled as a result of an accident or a disease. The affected party qualifies for the benefit only if the injury/disability happened either at work or on an approved employment training scheme or course and the claimant needs to have a contract of employment to benefit.

This benefit should extend to the disabled self-employed. Like employees, the self-employed who suffer from a debilitating injury should be able to access IIDB and prevent these individuals being forced to use up most or all of their savings in order to cover basic living expenses.

• Re-design the Work Capability Assessment. The Work Capability Assessment (WCA) is used to determine Universal Credit eligibility and whether claimants meet work-related requirements in order to keep getting the benefit in full.

However, the current process of obtaining this welfare support is often a difficult and onerous process for many disabled people which often leads to imprecise and wrongful decisions due to the structure of the WCA.

The government is currently consulting on whether further support and improved services are required with the current WCA as part of the DWP’s Health and Disability Green Paper. As part of this review, government should ensure disabled people with a range of physical and mental health impediments are part of the process to co-produce a fair assessment and result. Greater collaboration between the assessing body and the client, with assessment made on a mutual basis, would ensure a high standard of transparency and fairness.

• Reform Universal Credit by extending the start-up period and permanently suspending the Minimum Income Floor. The Minimum Income Floor (MIF) is used by the Department for Work and Pensions (DWP) to check if a self-employed claimant has earned more or less than they expect the claimant to earn.

This expected amount that the DWP expect you to earn each month is referred to as a claimants’ MIF.

The current system for calculating Universal Credit payments is particularly discriminatory for self-employed claimants. This is because the MIF method fails to accurately account for fluctuating incomes, instead often failing to increase the Universal Credit payment despite the claimant earning less than their MIF. Should a claimant earn more than their Minimum Income Floor, the DWP calculates the Universal Credit payment based on the actual earnings of the claimant but fails to use actual earnings when a claimant earns less than expected.

The government previously suspended the MIF for self-employed Universal Credit claimants in April 2020 due to the impact of the pandemic, before being re-introduced from August 2021. The government is clearly aware that the mechanism for calculating Universal Credit payments penalises those struggling, otherwise it would not have sought to suspend the MIF during the challenging economic conditions of the pandemic.

To accurately account for fluctuating incomes, earnings of self-employed Universal Credit claimants should be calculated on an annual or quarterly basis rather than month-to-month. By extending the calculation period, Universal Credit payments should be greater than the MIF, should a claimant earn less than expected in a month and ultimately provide for a fairer system.

In addition, the start-up period for Universal Credit is currently 12 months which fails to account for the time a self-employed business needs to establish itself. For instance, the Institute for Fiscal Studies has previous revealed that one-fifth of self-employed businesses fail in the first 12 months.11

Therefore, we believe the start-up period for Universal Credit should be increased to two years to reflect the time a self-employed individual needs to establish their business.

• Promote and expand the Access to Work scheme. The Access to Work scheme provides vital support to disabled people taking up work, providing grants for personalised support that enables them to take the next steps towards employment.

We believe that the current scheme should be publicised more widely, potentially targeting Job Centres, University campuses and local advice hubs or centres.

• Expand the adjustment passports trial to those considering a self-employed career. The government is currently piloting a scheme for adjustment passports to help disabled graduates continue with their assessment through Access to Work, and ultimately support them into employment.

This should be extended to those considering a self-employed career.