FSB calls for more self-employed support

Support for the self-employed business person has never been more crucial, says the FSB’s Tina McKenzie

Every business starts with a great idea, but the right support helps turn it into a success. With nearly half a million businesses lost post-pandemic, that support has never been more crucial. We need to rebuild by helping 500,000 more businesses take root by January 2028.

Our latest research shows that 67% of those who start their own business do so for the freedom it offers, while 53% cite work-life balance.

The ambition is certainly there, but now the government must match it with the right policies. 

Take Universal Credit (UC). A total of 28% of sole traders say reforming it would help them grow or start their business – but current rules can leave them far worse off than if they had stayed on benefits. Extending the start-up period for UC claimants from 12 months to two years and shifting to quarterly income assessments would better reflect the reality of running a business, particularly in sectors like fashion, retail and manufacturing where income fluctuates with seasonal demand. 

Women face a steeper climb. Nearly a quarter (23%) of women under 45 say better access to the Maternity Allowance would improve their ability to launch of expand a business. Right now, this is significantly lower than Statutory Maternity Pay and it’s treated as “unearned income” under UC – meaning self-employed mothers are penalised for taking maternity leave. Bringing Maternity Allowance in line with SMP in the first six weeks and not treating the Maternity Allowance as “unearned income” for the purposes of UC would make a huge difference for thousands of female entrepreneurs.

Practical changes could also unlock a new wave of business. A ‘New Traders Allowance’ could replace the New Enterprise Allowance, giving jobseekers real support to transition into self-employment. Doubling the trading allowance from £1,000 to £2,000 would give side hustlers room to grow into full-time business owners. Expanding tax relief on training would help small business owners upskill and stay competitive.

Setting a national target of 500,000 new businesses by 2028 would help the UK’s business landscape return to pre-pandemic levels. By making sensible policy changes, we can ensure more people have the opportunity to succeed on their own terms.