This has led to 23% of self-employed workers in the UK considering stopping being self employed altogether.
More than half (51%) of self-employed people in the UK think their financial situation has become worse over the past year, according to research from Aldermore.
Three in five (59%) said their monthly earnings had decreased since the pandemic began, with 41% believing they will not get back to their pre-COVID earnings soon.
This has led to 23% of self-employed workers in the UK considering stopping being self employed altogether.
Two in five (38%) said they were less confident about their business’ future since the pandemic began, with 33% not having enough savings to last three months if they found themselves out of work.
However, nearly half (46%) of self-employed people said they have adapted their business to help them stay afloat, whilst 13% utilised this time to completely change their business model.
This was particularly true of those aged between 18 and 35, with 23% of this age group completely changing their business model.
Within this age group, a third (34%) were more confident about the future of their business and one in four (23%) said they were personally financially better off than a year ago.
Nevertheless, one third (33%) said they did not have enough savings to last three months if they find themselves out of work.
Non-COVID related financial issues remain a concern also, with 29% believing Brexit will have a negative effect on their business, and only 10% believing it will have a positive effect.
Jon Cooper, head of mortgage distribution at Aldermore said: “The self employed sector make up a significant proportion of the workforce and is a breeding ground for innovation and advancement in many industries, so they will play an important part in the UK’s economic recovery post-COVID.
"The self employed are often fulfilling a life’s dream in creating their business, and some of the biggest companies in the world like Amazon and Facebook started as small start-ups, so it is crucial this entrepreneurial spirit is supported by government and lenders through these tough times and for whatever future life plans they have.
“For the self employed that may feel pessimistic about their future home buying prospects after this difficult period, there are options available to help.
"It’s important to seek advice from a broker who can provide whole of market experience and to explore specialist lenders options, as they function to dig into the detail of an applicant that may have complicated income streams lifting traditional barriers to getting on the housing ladder.”
