By 2018 the number of Umbrella Company Employees and other self-employed freelancers in the UK will exceed the number of public sector workers for the first time since records began in 1999, a new study predicts.

Research by the RSA think-tank forecasts that the UK’s self-employed freelance workforce will hit the five million mark in just four years and overtake the dwindling public sector workforce, which will fall to 4.8 million. This will be the first time in 15 years that the UK will see its public sector workforce fall below one-fifth of the working population.

Currently, the numbers stand at 4.5 million self-employed and 5.5 million public sector staff, but further austerity measures are likely to diminish the latter.

The rise in self-employment is being driven by a combination of factors, the report argues, amongst them the continuing restraint on pay awards after five years of pay freezes and pay cuts. This makes self-employment seem more attractive to more people, the study suggests.

The study also finds that younger people entering the workforce are more averse to traditional workplace hierarchies than their parents and grandparents, and are more drawn to self-employment as a consequence. The report states: “We are witnessing a shift in values where people want to be masters of their own fates.”

Additionally, people with family commitments wish to work flexibly and are finding that the only realistic option for them is switch to self-employment or professional contracting.

The number of self-employed people in the UK has risen by over 500,000 since the coalition took office nearly four years ago.

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