Employed or self employed – the pros and cons

Many people are often scared by the concept of being self employed. In fact, a survey in March 2019 found that only a staggering 15.1% of people work in a self-employed capacity (source: ONS). There are many advantages and disadvantages to being self employed or employed, particularly within the Financial Services industry – so we have kindly collected some of the top points for each…

What are the most common reasons that 84.9% of people choose to be employed?

You have a guaranteed level of income per month

This benefit is arguably the most common reason why people chose to be employed. We all have bills to pay (no matter how big or small), so it’s comforting to know that your important expenses and financial commitments are covered.

Employed benefits

You aren’t responsible for calculating your own tax

As an employee, you come under the PAYE system, which is designed to collect your income tax and National Insurance automatically. This is good news if you dislike maths or don’t want the cost of hiring an Accountant!

You have the benefit of holiday and statutory sick pay

This is understandably a huge benefit of being employed. Companies are required, by law, to provide workers who work 5 days a week, at least 28 days of paid holiday entitlement per annum (within financial services jobs, this is normally provided as 20 days + 8 bank holidays). Fun fact: the average UK holiday entitlement, including public holidays, is 33.5 days per year!

All of the above benefits sound great, right?! So why become self-employed?

You have greater control on how much you earn – and your potential income is unlimited

Although you are not guaranteed to earn ‘x’ level of income per month, your income will often be a direct reflection of the work you put in. If you have a fantastic work ethic, you could quite easily exceed your current employed earnings!

You have flexibility of your own schedule

As a self-employed individual, typically you have full autonomy over your diary – you can work at the times that suit you best and escape the 9 – 5. This often can help those wanting the flexibility to balance work and life commitments. See our blog on work from home – the pros and cons

You can reduce your everyday costs / expenses

As a self-employed individual, you can deduct allowable business expenses. In short, this allows you to claim back the certain costs of business-related items / expenses (such as travel, internet, phone bill, marketing and training courses etc). These deductions can reduce your expenses and potentially save yourself some money!

Disadvantages of being employed


Some companies / managers micro-manage their employed staff. This means they oversee all of your work and become overbearing with checking even the smallest of tasks you complete. This can be a huge drawback, as it can make an employee feel under pressure.

Job security

Redundancies can be a threat to any worker. Unfortunately, for employees they can often come as quite a shock, with often full teams being made redundant. Therefore, whilst you might be the top performer but if your office location is being closed, there is not much you can do! Self-employed individuals can also have their contracts terminated, however employed individuals are at a greater risk.

Disadvantages of being self-employed

No holiday or sick pay

If you are not feeling well enough to work or on holiday, there is nobody to cover for you. When you’re self-employed, you are paid for the work you do! Fortunately, within financial planning and mortgage advice, the nature of your sales pipeline means the earnings tend to even out which has less of a direct impact

Getting a mortgage

There is a common misconception that you can only get a mortgage if you are employed. This, of course, is completely false. However, when applying for a mortgage, it is common for your Mortgage Advisor to request for a minimum of 2 years’ worth of accounts for proof of earnings. You should still be able to take out a mortgage if you’re self-employed, but the process is likely to take longer than usual. Being within the financial services industry, hopefully you will know a good Mortgage Advisor who can help you!

self employed mortgage

The big question is: how do you decide which route is the right move for you?

When deciding whether to go employed or self-employed, it is important to consider your own personal circumstances, goals and lifestyle. If you get distracted easily, find it hard to motivate yourself and don’t have good self-discipline, the employed model may be more suited to you. If you are someone who likes to be in control of your day, enjoys having a flexible schedule for outside-of-work commitments and if you are motivated by earnings, the self-employed model may fit you best.

If you’re unsure on which route is best for you or would like to know more about the pros and cons, give us a call today on 0208 0044 154 and you’ll be able to speak to our Recruitment Consultants – with most of our team having personal experience of being both employed and self-employed!

Please note, when deciding the monetary benefit of employed vs self-employed, seek guidance from a professional. For helpful information, there are many websites you can refer to, including gov.uk