Report: Self-Employed Women in the Time of Covid

This report, written by Erika Watson of Prowess, was commissioned by the Women’s Budget Group to inform the Commission on a Gender-Equal Economy. The executive summary and recommendations are below. For the full report see the Commission website.

Executive Summary

Since the 2008 financial crash, a sharp rise in predominantly female self-employment has absorbed much of the economic shock. In the past 10 years, self-employment among women in the UK has increased at a higher rate than any other category of employment. There are 43.5% more self-employed women than there were a decade ago, a percentage increase two times that of self-employed men over the same period.

At the same time, the financial security and resilience of self-employed women in the UK has declined. While self-employment remains a positive option for those who are established and have personal assets, almost one-third of the self-employed, disproportionately women, are low-paid and insecure.

The growing and allegedly flexible gig economy is proving to be anything but for women. Instead, it amplifies the inequalities of the old economy. And as for the new tech and STEM economies, women seem to be shut out and falling behind there too.

Changes to the tax and benefits system have been brutal for self-employed women. The welfare safety net is no longer fit for purpose – changes to universal credit have left the vast majority of the low-income self-employed better off unemployed.

Flexible, often part-time, self-employment enabled people with disabilities, carers, and lone parents, to maintain their skills, prospects, and dignity. For those with few assets and low incomes, Universal Credit changes have made that way of working impossible. Flexible self-employment supported the social care system, families, and communities. Its loss is a wider societal blow.

The COVID-19 crisis stretches the resilience of the self-employed to breaking point and beyond. The government’s Self-employed Income Support Scheme is patchy and women are much more likely to miss out. Urgent action is needed to rectify this immediately. As COVID-19 continues to evolve, there is a need for a serious review of how the flexible labour market can be reformed to more effectively support societal and economic resilience.


1. Fair income support for self-employed women during the coronavirus crisis

The new self-employed, who started their business after April 2019, are excluded from the COVID-19 Self-employment Income Support Scheme. Almost ALL of this group are women. The scheme also discriminates again women who took maternity leave during the three-year assessment period.

Recommendation 1

Immediately adjust the COVID-19 Self-employment Income Support Scheme to fairly support self-employed start-ups, almost all of whom are women, and self-employed women who have taken maternity leave during the SEISS qualification period.

2. Equalise parental benefits for the self-employed

Self-employed mothers are not entitled to Statutory Maternity Pay, instead, they can claim a much lower amount of Maternity Allowance. Self-employed parents have been explicitly excluded from the right to Shared Parental Leave, introduced in 2015.

Recommendation 2

Equalise parental benefits, so that self-employed parents are entitled to the same level of  Statutory Maternity Pay and Shared Parental Leave as employed parents.

3. Incentivised retirement savings

Self-employed women have fallen far behind employed people and self-employed men in their ability to save for retirement. Just 22% are saving towards a private pension, compared to 33% of self-employed men and 65% of people who are employed.

Recommendation 3

Incentivise pension contributions and ISA schemes for the self-employed.

4. A skills strategy for women in the new economy

The occupational segregation of self-employed women mirrors the employed sector. Women are more likely to work in and to become self-employed in sectors that are in decline and they are highly under-represented in growth sectors, particularly STEM. In addition, general support for new businesses has in recent years more often excluded the solo self-employed. The vast majority of these who have become solo self-employed in the last 10 years have been women.

Recommendation 4

A government skills strategy for women in the new economy.  This must include a strong focus on women into STEM industries and female-focused skills training, coaching, business incubation, and support for self-employed women.

Business support and training for the self-employed is to a great extent delivered via public funding. As such, this support is subject to the Public Sector Equality Duty and it should be required to demonstrate and ensure greater equality of outcome

5.  A social security safety net fit for a post-COVID economy

While flexible, often part-time, self-employment has, in the past, enabled people with disabilities, carers, and lone parents, to maintain their skills, prospects, and dignity, the introduction of Universal Credit for the self-employed has left the vast majority of those groups better off unemployed.

Most self-employed women aren’t just earning an income, they are also providing more unpaid work at home and in their communities than most other people.

A post-COVID economy is predicted to have higher levels of unemployment and underemployment. In that light, the current inflexibility of Universal Credit for the self-employed looks particularly short-sighted, in terms of both societal and economic resilience.

Recommendation 5

The Universal Credit Minimum Income Floor (MIF) has been suspended for the duration of the COVID crisis, providing temporary relief to the low-income self-employed. The MIF should be permanently abolished along with the £16,000 asset limit.

Recommendation 6

The COVID crisis has shown us the limit of individuals being able to absorb the shocks affecting the wider economy. Beyond this crisis, a more holistic social security safety net will be needed. A Citizens Jury should be commissioned to investigate the merits of a Universal Basic Income.