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Self-employment can often be an attractive prospect, with more opportunities for flexible working and creative freedom. The responsibility of being your own boss can also mean more stress though, especially with the effects of the cost-of-living crisis looming like the ghost of Christmas past on everyone’s balance sheet.

For some business owners, the Ghost of Christmas Yet to Come is just as daunting.

We spoke to more than 1,200 self-employed workers to gauge the impact this is having on their health and business.

Surveying 1,200 self-employed business owners: Key findings at a glance

  • Almost half of self-employed workers have said their work-life balance had changed because of the cost-of-living crisis
  • 70% of those surveyed admitted they’ve had to spend less time with family and friends over the past 12 months in order to focus on their business
  • Over half say the expectation of lower-than-normal sales is their biggest concern for 2024
  • 23% increase in people closing their business for Christmas due to their mental health

How is the cost-of-living crisis affecting entrepreneurs this Christmas?

The strain on businesses

Although many self-employed workers (41%) expect a drop in demand for products and services over Christmas due to the nature of their business, there’s a huge increase in the number of entrepreneurs struggling to attract customers compared to previous years.

As a result, self-employed people are becoming increasingly worried about how they will manage to pay themselves, their staff, and their bills this Christmas.

Before the cost-of-living crisis, 32% said finding and attracting customers was the biggest issue for their business at Christmas, with over a quarter (28%) claiming paying themselves was an issue and 12% having problems paying their bills.

“It is harder in this year’s Christmas period to find sales/customers than in previous years. I find I am offering more discounts which in turn in affecting turnover and profit margin, however I know the harder I work to do this now, the better position I will be in come the very quiet months after Christmas.”

This Christmas, 41% said finding and attracting customers was their biggest concern – a 26% increase on the previous year. 31% are reporting worries about paying themselves, and 20% are experiencing issues paying their bills.

More employers feeling the pressure

Despite an increase to minimum wage, the threshold at which employers start paying National Insurance contributions remains frozen, meaning bosses will see a further rise in hiring costs.

With profit margins already being squeezed by the cost-of-living crisis, our survey shows a 50% increase in employers concerned about paying staff.

Issues faced by self-employed people at Christmas before the cost-of-living crisis compared to this year

We asked our survey panel to tell us about the issues their business has faced in Christmas-past, and what problems they are facing this year.

Previous Years This Year
Finding / attracting customers 32% 41%
Paying yourself 28% 31%
Paying bills 12% 20%
Managing workloads 26% 26%
Competition 15% 19%
Paying staff 3% 5%
Recruiting 5% 4%

Looking at the year ahead

The New Year is normally a time of revitalised enthusiasm for many, but the fear of falling sales haunts 54% of those surveyed, along with inflation worries (44%), increased business rates (27%), and rising energy costs (25%).

“In the past we would have paid ourselves a bonus in January based on the success of the previous year, but we won’t be doing that this year.”

What does this mean for self-employed working habits?

Nearly half (43%) of respondents in a previous survey said they were motivated into self-employment by a desire to improve their work-life balance, but recent findings reveal the cost of living crisis has had the opposite effect.

Almost half (47%) of self-employed workers surveyed said their work-life balance had changed because of the cost-of-living crisis.

A staggering 70% have been forced to spend less time with family and friends, whilst a third (34%) admit they’ve had to spend less time with a partner.

A bleak statistic from the survey also reveals 30% of self-employed workers have become socially withdrawn because of running a business.

The effect on self-employed mental health

Anxiety and burnout are leading causes of mental health problems for entrepreneurs and almost a quarter reported suffering from insomnia.

45% said they suffered with anxiety, 42% admitted to suffering from burnout, and 22% had struggled with insomnia.


Almost half (45%) of self-employed workers have been forced to change their business plans because of mental health issues. More said they were taking time off work for mental health reasons this year (26%) than at Christmas before the crisis began (20%).

Coping strategies

Exercise was the second most popular choice to combat stress over the Christmas period (49%) and walking was third (40%).

Although 70.6% said their coping strategies hadn’t changed since the cost-of-living crisis began, there has been an increase in self-employed workers opting to keep fit (54%) and practice meditation (28%) to combat stress.

How are self-employed people tackling stress this Christmas?

Despite increased pressure of work since the cost-of-living crisis began, the approach of Christmas has led many to recognise the importance of spending time with family and friends.

In fact, almost two-thirds (60%) said spending time with family and friends was the best way to cope with stress during the Christmas period.

33% said they would be closing to spend time with family and friends over the festive period this year – compared to 23% who closed for that reason last year.

The Bob Cratchit Effect

This December marks the 180th anniversary of the Charles Dicken’s classic A Christmas Carol.

Despite worries about the cost-of-living crisis and the Christmas period for SMEs and entrepreneurs, spending time with family and friends is a higher priority than last year.

“The pressures of the cost-of-living crisis have meant small business owners and entrepreneurs are working harder throughout the year and missing out on quality time with family and friends.”

Lee MurphyManaging Director of The Accountancy Partnership

“Despite the issues faced this year, spending time with loved ones is a priority this Christmas and we expect this trend to continue to rise if economic crises continue to mould life in modern Britain.

“We’ve called the increase The Bob Cratchit Effect as a nod to the literary character whose love for Christmas and his family has been endearing for almost two centuries.

“One of the famous quotes in the book is from the ghost of Jacob Marley, who says ‘mankind was my business’.

“Our research suggests we are a nation of Bob Cratchit’s who are not burdened by his employer Scrooge’s cold focus on making money, which is something to celebrate this Christmas.”

Learn more about our online accounting services for businesses. Call 020 3355 4047 to chat to the team, and get an instant online quote.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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