ARE YOU BETTER OFF AS AN EMPLOYEE? Jack’s Redundancy Empowerment - Empowering Redundant Workers - Jack Lookman Limited - Carew

ARE YOU BETTER OFF AS AN EMPLOYEE?

The question worth sitting with

There is a story that gets told a lot in the weeks after redundancy. You were working for someone else. That arrangement ended without your say. So now you take control. You go self-employed. You become the person who cannot be made redundant because you are the one making the decisions.

It is a compelling story. It is also, for a significant number of people, the wrong one. Not because self-employment is bad, but because for many workers in many circumstances, employment is genuinely better. Not just emotionally safer. Financially better. And the people who discover these six months into a difficult first year of freelancing, with bills arriving and client work inconsistent, tend to wish someone had told them earlier.

So here it is: a genuine, unsentimental look at whether employment might actually be the stronger option for you.

What your employer was paying for, that you did not see

When you were employed, your salary was not the full cost of having you. Your employer was also paying employer National Insurance contributions at 13.8 percent of your earnings above the threshold. They were contributing at least 3 percent of your qualifying earnings into your pension under auto-enrolment. They were providing statutory sick pay when you were ill, paying you for annual leave, and covering any employer liability insurance that applied to your role.

None of that money passed through your hands. Which means most people have no feel for its actual value until it stops. If you go self-employed, you now carry those costs yourself, or you simply go without them. The pension contribution alone is worth several thousand pounds a year for most workers. Statutory sick pay, which is not generous, is still something. Holiday pay is something. These are not abstract benefits. They are money, and they matter to the comparison.

The real costs of self-employment

The most common mistake people make when evaluating self-employment is to take their day rate, multiply it by the number of days they plan to work, and call that their income. It is not. It is their gross revenue before costs.

From that revenue, you pay: income tax on profits, Class 2 and Class 4 National Insurance, any accountancy fees (a competent accountant for a sole trader costs between 500 and 1,500 pounds per year), professional indemnity or public liability insurance depending on your work, any software or equipment you need, and the cost of the time you spend on administration, business development, and chasing payment. None of that is billable.

You also need to account for gaps. You do not bill for sick days, bank holidays, annual leave, or the weeks where you have finished one project and the next is not confirmed yet. For most freelancers, that amounts to six to ten weeks of unbilled time per year. If you do not build that into your rate, those weeks come directly out of your income.

Run the full calculation. Not the optimistic one. The one that includes accountancy, insurance, gaps, and a rough estimate of your administration time. Then compare that to what employment would offer. For many people, the honest comparison is closer than they assumed.

When self-employment does make sense financially

There are sectors and skill sets where the contracting market genuinely pays rates that make the numbers work. If you are a senior software developer, a qualified accountant, a project manager with a strong track record, a lawyer, an engineer, or a designer with a clear portfolio, the market may well pay you at a level that comfortably absorbs the costs of self-employment and leaves you better off.

The critical factor is not just the rate you can charge. It is whether you have the professional relationships and reputation to maintain a consistent pipeline of work. Most people who have worked in employment for a long time have skills that the market values. Fewer have the established network to convert those skills into reliable work from month one. The gap between those two things is where the financial case for self-employment most often breaks down in the early months.

Job security is not what it used to be, but employment still has a structure

The standard argument for self-employment is that job security is an illusion anyway, and you have the evidence to prove it. That is fair as far as it goes. Employment does not guarantee permanence. You have just found that out.

But the risk profile of employment and self-employment is different in ways that matter. Employment concentrates your income dependency in one employer, which is a risk, but it wraps that risk in statutory protections: redundancy pay, notice periods, the right to claim unfair dismissal after two years of service, and the ability to claim Universal Credit or Jobseeker's Allowance if things go wrong. Self-employment spreads your dependency across multiple clients, which does reduce concentration risk. But if two or three clients simultaneously reduce their spending, as happens reliably in economic downturns, your income can fall faster than it would in employment, and there is no equivalent safety net.

Neither structure is objectively safer. They carry different kinds of risk; and which kind you are better equipped to handle, depends on your savings, your domestic commitments, your personal tolerance for uncertainty, and the specific market you would be operating in.

The case for employment if you are still building your career

There is an argument for employment that rarely gets enough attention: structured development. Good employers invest in the people who work for them. They fund training, provide mentorship, offer routes to progression, and put you in the room with people and problems that develop your professional judgement, in ways that isolated self-employment simply cannot replicate.

For anyone under forty who is still accumulating the skills and relationships that determine long-term earnings, the development value of a strong employment role may well outweigh the short-term financial appeal of going it alone. This is particularly true in technical fields where certification and structured learning matter; and in industries where the relationships you build inside organisations become the foundation of everything that comes later.

If your redundancy payment gives you any breathing room at all, use some of that time to make this decision properly, rather than reactively. Run the actual numbers for both paths. Talk honestly to people who have made each one. Think about your domestic situation and your financial reserves. Consider speaking to an independent financial adviser before committing to either direction.

Self-employment is not better than employment in the abstract; and employment is not necessarily better than self-employment. What matters is which one fits your actual circumstances, your genuine skills, and the specific moment you are in. Taking the time to work that out is not procrastination. It is how you avoid making an expensive mistake in either direction.

EFFECTIVELY MANAGING EXPECTATIONS FROM BUSINESS - Jack’s Redundancy Empowerment - Empowering Redundant Workers - Jack Lookman

EFFECTIVELY MANAGING EXPECTATIONS FROM BUSINESS 

Losing a job through redundancy changes the way many people see work, money, and security. For some UK workers, redundancy becomes the push that finally makes them consider business ownership. Some begin freelancing. Others start small online stores, cleaning companies, consulting businesses, catering brands, tutoring services, or side hustles that slowly become full time income.

But one of the biggest reasons businesses fail after redundancy is not lack of skill. It is unrealistic expectations.

Many people walk into business expecting fast profit, instant freedom, loyal customers, flexible schedules, and financial independence within a few months. What they meet instead, is uncertainty, inconsistent income, difficult customers, long working hours, and pressure they never expected.

That does not mean business is a bad idea. It means expectations need to be managed properly.

For UK workers rebuilding their lives after redundancy, business can become a strong recovery path. However, it works best when approached with patience, realism, and practical planning.

Business Is Not Immediate Financial Freedom

One of the most common misconceptions about business is that it automatically creates freedom. After redundancy, many workers become emotionally exhausted from office politics, difficult managers, rigid schedules, and corporate instability. The idea of being self-employed starts to sound attractive. No boss. No meetings. No fixed hours.

But in reality, most new business owners work more hours in the beginning than they ever worked as employees.

When you are starting out, you are often the marketer, customer service representative, accountant, sales person, operations manager, and delivery team all at once. Even simple tasks take longer because there are no systems yet.

Revenue is not the same as income

This distinction sounds obvious until you are living it. When you are employed, your monthly take-home is predictable. You know what it is, you plan around it, and aside from the odd expense claim, the money arrives without additional effort on your part.

When you run your own business, even a simple sole trader operation, the relationship between what you earn and what you actually have available, changes completely. You invoice clients, and they pay when they pay. The average small business in the UK is owed thousands of pounds in late invoices at any given time. You have to account for tax, National Insurance, any business costs, and the months where work is quieter than you expected.

Before you decide that business is your financial route forward, after redundancy, do the maths honestly. Work out what your actual monthly cost base is. Rent or mortgage, utilities, food, travel, any dependants. Then work out what you would realistically need to bill or sell each month to cover that, and set a little aside. Most people who do this exercise properly, either discover the target is achievable, which is encouraging, or discover it is higher than they assumed, which is genuinely useful information to have before you start, rather than six months in.

Clients are not just income sources

If you are going into consulting, freelancing, or any kind of service business, your clients are the people who determine how your working days actually feel. Some of them will be a pleasure to work with. Some of them will ask for things that were never in the brief, and seem genuinely puzzled when you raise it.

The best protection against scope creep, which is the polite term for doing more work than you agreed to, for the same fee, is specificity upfront. A written agreement that states clearly what is included and what is not. Not because you expect a legal dispute, but because a clear agreement means both you and the client know where you stand. That clarity is actually what good client relationships are built on.

Clients who feel respected and well-informed tend to become repeat clients. They also refer other people. In the early months of running a business, referrals are worth more than almost any form of marketing. You build that kind of trust by being clear, honest, and consistent. Not by saying yes to everything.

Time will surprise you

Employment gives you structure that you only notice once it is gone. Even a job you found tedious imposed a shape on your days. When you leave that and try to build something new, the unstructured time can feel like freedom and then, fairly quickly, like a weight you were not prepared for.

Business development takes time. Admin takes time. Chasing invoices, keeping records, filing returns, responding to enquiries that go nowhere. All of this is time that in employment, was either handled by someone else, or simply was not your problem. Now it is yours.

The people who tend to do well in business after redundancy are the ones who treat their new working life with the same intentionality they brought to employment. Not the same hours necessarily, but the same discipline. They set clear targets for the week. They track whether the work they are doing is actually moving the business forward. They do not just react to whatever appears in their inbox each morning.

Have the honest conversation at home first

If you share your life with a partner, children, or anyone who depends on your income, they need to know what the realistic timeline looks like. Not the optimistic version. The honest one.

Building a business, while the people around you have different assumptions about your financial situation and timeline, creates stress that piles on top of the professional stress, in ways that are genuinely damaging. People handle uncertainty far better when they feel included in it rather than surprised by it.

If you are going self-employed, tell your household it may take six to twelve months before the income is stable. If you are still job hunting at the same time, which is often the sensible approach, be clear about that too. You do not need everyone's approval for your decisions. You do need the people closest to you to understand what you are actually trying to do.

What good expectations actually look like

A useful expectation is specific, grounded in something real, and adjustable when evidence tells you to adjust it. Something like: over the next eight weeks, I will speak to at least two potential clients a week and review whether the response I am getting matches what I expected. That is a realistic expectation you can actually act on and test.

A bad expectation is: things will pick up soon. It might be true. But you cannot do anything with it.

Redundancy, for everything it takes from you in the short term, is a genuine opportunity to build something that fits your life and your skills better, than what you had before. The UK labour market is not closed to people who have been made redundant. Nor is the market for freelancers, contractors, and small business owners. But the people who come through this period well are not the ones who simply hope things will improve. They are the ones who look at what they are actually dealing with, set targets they can work towards, and change their approach when something is not working.

That is not a complicated formula. It is just harder than it sounds when you are in the middle of it. Which is why it is worth naming it clearly before you start.