This article updates a 2021 report by Erika Watson of Prowess, commissioned by the Women’s Budget Group for the Commission on a Gender-Equal Economy. The original report was written at the height of the COVID-19 crisis; the policy landscape has shifted since then, but many of the structural barriers facing self-employed women remain. The executive summary and recommendations below reflect the post-pandemic position as of early 2025.

Executive Summary

Since the 2008 financial crash, the rise in female self-employment has helped absorb economic shocks. Over the decade to 2020, self-employment among women in the UK grew faster than any other employment category, increasing by more than 40%—roughly double the rate for self-employed men. Although the pandemic caused a temporary fall, women have continued to return to self-employment: by late 2023 there were around 1.6 million self-employed women in the UK, accounting for over one-third of the self-employed workforce.

Yet financial resilience among self-employed women has not kept pace. While self-employment works well for those who are established and have assets, a significant minority—disproportionately women—are low-paid and insecure. The gig economy and platform work have often reproduced, rather than removed, gender inequalities, and women remain under-represented in the higher-growth tech and STEM sectors.

Changes to tax, benefits and social security have been particularly harsh for self-employed women. The design of Universal Credit left many low-income self-employed claimants worse off than they would have been as employees or unemployed, and the COVID-19 Self-Employment Income Support Scheme (SEISS) excluded some of the most vulnerable groups.

Flexible, often part-time, self-employment has historically enabled disabled people, carers and lone parents to keep their skills, income and dignity. Where Universal Credit and the Minimum Income Floor made that way of working impossible, the loss was felt not only by individuals but by families, communities and the social care system.

The pandemic exposed how much economic risk has been shifted onto individuals. Many emergency measures have now ended, but the underlying problems persist. A serious review of how the flexible labour market and social security system support self-employed women is still urgently needed.

UPDATED RECOMMENDATIONS

1. Fair income support for self-employed women

The SEISS launched in 2020 and closed in September 2021 after five grants. It supported millions, but gaps remained. The newly self-employed—who started after April 2019 and were disproportionately women—were excluded from the first two grants because they had not filed a 2018-19 tax return. Later grants used 2019-20 returns, but only if filed by the deadline, leaving some still without support.

The scheme also failed women who had taken maternity, adoption or shared parental leave during the reference period, because their trading profits were lower than usual. Following legal challenges and campaigning, HMRC allowed some parents to use an alternative reference year for the fourth and fifth grants. However, the scheme has now ended and there is no permanent safety net for the self-employed.

Recommendation 1

Any future income-support scheme for the self-employed must be designed with women’s working lives in mind from the start. That means including recent start-ups, recognising maternity, adoption and caring interruptions in profit calculations, and creating accessible contingency support for those whose earnings are disrupted by health, care or economic shocks.

2. Equalise parental benefits for the self-employed

Self-employed mothers are still not entitled to Statutory Maternity Pay. Instead, most claim Maternity Allowance, which in 2024-25 pays up to £184.03 a week for 39 weeks, or 90% of average weekly earnings if lower. Unlike SMP, there is no higher earnings-related rate for the first six weeks. Self-employed parents remain excluded from Statutory Paternity Pay, Shared Parental Leave and Shared Parental Pay, and from the right to return to self-employment after time out.

Recommendation 2

Equalise parental benefits so that self-employed parents receive equivalent support to employees, including an earnings-related maternity payment, access to paternity and shared parental pay, and protection against loss of work while caring for a new child.

3. Incentivised retirement savings

Self-employed women continue to fall behind employed people and self-employed men in pension saving. DWP’s most recent figures suggest that only around one in five self-employed women are contributing to a private pension, compared with around one in three self-employed men and around two-thirds of employees. The gender pension gap among the self-employed is therefore severe.

Recommendation 3

Introduce targeted incentives for pension contributions and long-term savings products for the self-employed, with particular outreach to women on low and intermittent incomes. Simpler products, matched contributions and integration with the tax self-assessment system could all help close the gap.

4. A skills strategy for women in the new economy

Occupational segregation persists. Women are more likely to be self-employed in caring, creative, administrative and personal-service sectors, while men dominate construction, transport and IT. Female solo self-employment has grown rapidly, yet mainstream business support—much of it publicly funded—still tends to target larger, employer-led ventures and can exclude the solo self-employed.

Because publicly funded business support is subject to the Public Sector Equality Duty, providers should be required to demonstrate equality of outcome, not just access.

Recommendation 4

The government should adopt a skills and enterprise strategy for women in the new economy, including female-focused STEM training, coaching, business incubation and support for solo self-employed women. Funders should collect and publish sex-disaggregated data on who receives support and what outcomes they achieve.

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

Universal Credit for the self-employed has changed since 2021. The £20 weekly uplift introduced during the pandemic ended in October 2021. The Minimum Income Floor, which assumed self-employed claimants earned at least the National Living Wage regardless of actual income, was suspended from March 2020 and reintroduced from August 2021. Following sustained pressure, the government announced in the 2023 Autumn Statement that the MIF would be abolished, with the change taking effect in 2024. This removes one major barrier, although the details of the replacement system matter.

However, the £16,000 savings limit for Universal Credit remains, which penalises self-employed people who need a cash reserve for their business. Most self-employed women also continue to shoulder a disproportionate share of unpaid care and domestic work, making rigid conditionality and reporting requirements difficult to meet.

Recommendation 5

Ensure that the abolition of the Minimum Income Floor genuinely improves incomes for low-earning self-employed women, and review the £16,000 savings limit so that it does not force self-employed people to deplete business reserves before they can get help.

Recommendation 6

The pandemic showed that individuals cannot be expected to absorb economy-wide shocks alone. The government should commission a Citizens’ Jury, or similar deliberative process, to examine the role of a more universal social security floor—including Universal Basic Income or a guaranteed minimum income—in supporting carers, disabled people and the self-employed.

Updating this report makes clear that the post-pandemic economy is not yet fairer for self-employed women. Closing the gaps in income support, parental benefits, pensions, skills and social security would be a significant step towards the resilient, gender-equal economy the original report envisaged.