More than 300,000 Britons aged 50 and above have become self-employed since the recession began five years ago, official figures revealed yesterday.
The Office for National Statistics said the number working for themselves has ballooned by 367,000 to 4.2million, the largest since records began in 1992.
Older people are fuelling the boom, with more than 80 per cent of the increase in self-employment since 2008 coming from those aged 50 and above.
The vast majority never earn as much when they are self-employed than they were earning before they lost their job
Of the extras, the ONS said 307,000 are in this age group, with many still working in their 70s or even 80s.
For many older workers, it is a positive choice as they decide to set up their own business after a lifetime of gaining experience working for somebody else.
But experts warn many older people are being pushed into self-employment as they simply could not find another job after being made redundant during the downturn.
Since the recession began the number of self-employed workers has jumped by ten per cent
Rather than drawing the dole, they decide to set themselves up as self-employed although many have little work to occupy themselves and earn far less than they need.
Keith Simpson, chief executive of Skilled People.com, a jobs website for the over-50s, said: ‘Eight in ten older people who are looking for a job say they think they are the victims of age discrimination.
‘As their jobs options are narrowing down, they have to look to other ways that they can stay economically active. Self-employment is the obvious one.’
He said the vast majority never earn as much when they are self-employed than they were earning before they lost their job.
Frances O’Grady, general secretary of the Trades Union Congress, said: ‘There may be perfectly good reasons for being self-employed but it would be naive to think that all these workers are really budding entrepreneurs.
‘Bogus self-employment is bad news for staff as they miss out on vital rights at work, such as paid holidays and employer pension contributions.’
John Walker, national chairman of the Federation of Small Businesses, said: ‘The rise in self-employment is not surprising as many people lost their jobs in the recession, and struggled to find another.’
Since the recession began in 2008, the ONS said the number of self-employed workers who want to work more hours, dubbed ‘under-employed’, has jumped to more than ten per cent.
The ONS said: ‘Some self-employed people were working fewer hours than they would have liked possibly due to a lack of demand.’
Overall, the ONS said 70 per cent of Britain’s 4.2million self-employed people are men who typically work 38 hours a week. The average age is 47, compared to 40 for an employee.
The most common occupations are taxi drivers, chauffeurs, carpenters, joiners and farmers. Over the last couple of years, the number of builders and landscape gardeners has jumped.
Malcolm McLean [corr], a consultant at the pension advisers Barnett Waddingham, said: ‘The considerable increase in over 50s who are becoming self-employed highlights the rise in the number of people who simply cannot afford to retire.’
The ONS said nearly 40 per cent of people aged 65 and above who are working are self-employed, which is far higher than any other age group.