When the pandemic hit the UK in 2020, self-employed women were among the first to feel the economic shock — and evidence gathered since then shows they have taken longer to recover. Early surveys suggested female sole traders, freelancers and micro-business owners lost almost twice as much income as their male counterparts, while also reporting a sharper decline in mental wellbeing. Several years on, the picture is more nuanced: many have rebuilt their businesses, but structural gaps in support mean the legacy of those losses is still visible in earnings, pensions and working patterns.

The income gap: what the data show now

At the height of the disruption, self-employed women were over-represented in the sectors forced to close overnight — hospitality, personal services, retail, creative industries and childcare. They were also more likely to have caring responsibilities that made it harder to pivot quickly to online or delivery models. A 2021 snapshot of sole traders and micro-businesses found women reported income falls of around 20%, compared with roughly 11% for men, with the drop driven mainly by falling demand rather than the closure of premises.

More recent analysis by the Office for National Statistics (ONS), the Women’s Budget Group and trade bodies such as IPSE and the Federation of Small Businesses (FSB) has confirmed that the hit was not a one-off. The total number of self-employed people in the UK remains below the pre-pandemic peak of around five million, and self-employed women’s median earnings have recovered more slowly than men’s in real terms. Female freelancers and sole traders continue to report lower day rates, more irregular pipelines and a higher dependence on a small number of clients.

The Self-Employment Income Support Scheme (SEISS) provided a lifeline for many, but take-up and payment levels did not reach everyone equally. Mothers who had recently taken maternity leave, people with variable profits and those who had only recently moved into self-employment often fell through the gaps. Unlike employees on furlough, the self-employed received no employer National Insurance or pension contributions, widening the long-term financial gap.

Today, with SEISS closed and the cost-of-living crisis squeezing household budgets, many self-employed women are rebuilding without a formal safety net. Universal Credit can help those on very low incomes, but the minimum income floor and five-week wait remain barriers for fluctuating earners. Income protection insurance and private sick cover are available, yet take-up is low because premiums can be unaffordable when margins are tight.

Mental health and the caring penalty

The financial pressure translated directly into mental-health strain. Early in the pandemic, more than half of self-employed women surveyed said their wellbeing had been negatively affected, compared with just over a third of men. The leading concern was providing for themselves and their families, followed by isolation from colleagues, friends and family, and worry about the future of the business.

Those pressures have not disappeared. ONS wellbeing data and surveys by mental-health charities continue to show that self-employed women report higher levels of anxiety than both male self-employed workers and employed women. The cost-of-living crisis, rising energy bills and childcare costs have added new layers of stress. For many, the flexibility of self-employment is a double-edged sword: it allows school-run hours and caring duties, but it can also blur boundaries and make it harder to switch off.

Simple habits — regular working hours, clear client boundaries, peer check-ins and time away from screens — can protect mental health, but they are easier to maintain when the business is financially stable. That is why pricing, cashflow and access to affordable support matter not only for profit but for wellbeing.

Why optimism persists

Despite this, entrepreneurial optimism among self-employed women has proved resilient. The same early research found women slightly more likely than men to describe themselves as optimistic about the future of their business, and around half of all respondents said they loved what they did so much that it did not feel like work. That motivation remains a powerful force.

Surveys by the FSB and Start Up Loans continue to show that control over working hours, the satisfaction of building something independently and the ability to follow a passion are the top reasons women choose self-employment. The UK also has a growing ecosystem of female-focused business networks, mentoring programmes and alternative finance providers that did not exist in the same form two decades ago. Digital tools have lowered some barriers to entry, allowing micro-businesses to reach national or international customers from a home office.

However, optimism should not be mistaken for an absence of need. Many female sole traders are working longer hours than before the pandemic to make up lost ground, and some have taken on debt or deferred pension contributions. The risk is that short-term coping strategies become long-term vulnerabilities.

What support do self-employed women need now?

Closing the recovery gap requires more than individual resilience. Policymakers and support organisations need to address the structural disadvantages that left self-employed women exposed in the first place.

• Childcare and caring infrastructure. Affordable, flexible childcare is as important to a sole trader as it is to an employee. Without it, women are more likely to reduce hours or turn down contracts.
• Social security that fits self-employment. Statutory sick pay, maternity pay and pension contributions should be reformed so that self-employed women are not penalised for working for themselves.
• Fair access to finance. Female entrepreneurs still receive a minority of venture and growth capital, and many rely on personal savings or credit cards. Government-backed loans, grants and mentoring can help level the playing field.
• Mental-health support. Free or subsidised counselling, peer networks and coaching designed for the self-employed can reduce isolation and burnout.
• Skills and digital confidence. Training in pricing, cashflow, marketing and technology helps women build sustainable businesses and avoid undercharging.

For women running their own business today, the lesson of the pandemic is that flexibility and determination are essential — but they are not enough on their own. Building a resilient micro-business means looking after wellbeing, planning finances carefully and connecting with networks that understand the realities of self-employment.

The UK economy depends heavily on its millions of micro-businesses and sole traders. If the recovery is to be inclusive, self-employed women must be at the centre of it — with support that matches their contribution.