Press release

From benefit claimant to boss: over 60,000 new businesses set up with government backing

Over 450 new businesses every week have been set up over the last year thanks to a government scheme.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


Over 450 new businesses every week have been set up over the last year thanks to a government scheme which helps people on benefits to become their own boss.

The New Enterprise Allowance (NEA) helps jobseekers, lone parents and people on sickness benefits with a good idea to set up their own business. New figures published today (19 December 2014) show the scheme has helped budding entrepreneurs set up over 60,000 new businesses, with help from a mentor and financial support payable through a weekly allowance.

As part of the government’s long-term economic plan to create jobs by backing small business and enterprise, the NEA has helped jobseekers of all ages. Over 4,000 young people, over 11,000 disabled people, and more than 14,000 over-50s have been helped to turn their hobbies into businesses.

Minister for Employment, Esther McVey said:

Small businesses are what make this country great – with their hard work, creativity, and entrepreneurial spirit they are fuelling Britain’s recovery. They are also providing a significant share of new vacancies, contributing to the record number of people who now have jobs.

As part of our long term economic plan, tens of thousands of new and innovative businesses are now up and running – from milliners to caterers and designers to counsellors – all of whom have benefited from the expert mentors who have given up their time to help the next generation of entrepreneurs.

The scheme has helped set up a wide range of new businesses across Britain, including a designer wedding dress-maker, a catering firm which has catered for big events such as the International Business Festival, and a computer-aided design business, which laser-cuts model aircraft.

Cumbrian entrepreneur Dylan Reynolds aged 43, who turned his radio-controlled aircraft hobby into a business said:

Without the New Enterprise Allowance scheme and my mentor, I would never have been able to take a hobby and turn it into a business. I have tried in the past on my own, but it never worked out. The mentoring helped me develop a good, sound business plan and gave me the confidence to get the business off the ground.

People on the scheme get expert help and advice from a business mentor who will help them to develop their business idea and write a business plan. If the business plan is approved, they are eligible for financial support payable through a weekly allowance over 26 weeks up to a total of £1,274. Participants can also access a loan through the BIS start-up loan scheme. Once a business is up and running, mentors continue to give entrepreneurs on-going support during the early months of trading.

From the new year, NEA will be extended to give family businesses a boost as the partners of anyone who is claiming Jobseekers’ Allowance will be able to apply. The scheme will also be extended to more people on sickness benefits.

The New Enterprise Allowance scheme is just one of the ways DWP offers tailored support to benefit claimants through our 700 Jobcentre Plus offices. Work coaches also work closely with local employers and can fill skills gaps through our job academies, apprenticeships and work experience schemes.

More information

The New Enterprise Allowance is available to:

  • people over 18 who are claiming Jobseeker’s Allowance
  • lone parents on Income Support
  • people on Employment and Support Allowance in the work-related activity group

Read the full NEA statistics

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Published 19 December 2014