Napoleon is often quoted as deriding Britain as ‘a nation of shopkeepers.’ In fact, the phrase was first used by the French Revolutionary, Bertrand Barère de Vieuzac in 1794 – and while the phrase may have been intended as an insult, there’s another side to the coin: hardworking, local, small-scale enterprises that served the community and provided jobs.

But is that now coming to an end?

According to analysis from Rest Less – which offers advice to older people – two years into the pandemic the UK has nearly 700,000 fewer self-employed people than at the peak in 2019. Two years ago there were 5m self-employed: that figure has now shrunk to 4.3m.

It has to be said that changes to legislation have seen many previously self-employed contractors move to company payrolls, but that is still a significant drop.

So has the UK lost its entrepreneurial spirit? Clearly a ‘nation of shopkeepers’ could now be interpreted as a nation of artisan bakers, web designers, photographers, hairdressers and a host of other professions. But the question remains: has the pandemic made people in the UK more security conscious – less willing to take the risk of ‘going it alone’?

The analysis from Rest Less shows that the number of self-employed workers fell across all age categories in the past two years, apart from those in their 70s and 80s. Interestingly, the 50-59 age group has more self-employed workers than any other age group.

Stuart Lewis, the founder of Rest Less, said, “The self-employed workforce has gone through a tumultuous couple of years [but] self-employment remains an attractive option for many workers in their 50s, 60s and beyond.”

It is easy to see why younger people – with mortgages to pay and families to raise – will find the security of employment attractive in the current climate. It is also easy to see why self-employment is attractive later in life, especially if you have been offered an early retirement package. At that stage of life, perhaps the mortgage is paid off and the children have left home.

Some of our more mature clients have gone down that route, now doing the job they were previously doing as an employee on a self-employed, consultancy basis. One thing we would stress though is that going self-employed – at any stage in life – requires careful financial planning. There are clear implications for your pension and for taxation. There are questions around whether you trade on a self-employed basis or set up your own limited company. If you’ve taken a lump sum as part of a redundancy package, there may also be investment considerations.

Moving from being employed to set up your own business is a tremendous – and exciting – challenge. But it may represent a major change to your long-term financial planning goals. We are more than happy to talk through all the implications with any clients or potential clients who might be considering taking that step – whatever type of ‘shop’ you are planning to open…