Research and analysis

Research with self-employed Universal Credit claimants Wave 2.

Updated 5 April 2024

Report Number: 89

A report of research carried out by Ipsos on behalf of the Department for Work and Pensions: Juliette Albone, Ayesha Birkett, Iona Gallacher.

1. Introduction and Methodology

Policy context

This research presents key findings from a survey of self-employed Universal Credit (UC) claimants. Self-employed (SE) workers on a low income may apply for support from Universal Credit. If a claimant is gainfully self-employed (their self-employment is their main activity and is regular, organised, developed and carried out in expectation of profit), UC payments are calculated using an assumed level of earnings called a Minimum Income Floor (MIF). At the time of this research, due to the Covid-19 pandemic, the tests to assess gainful self-employment (i.e. the gateway interviews) were temporarily suspended and the MIF was not applied to UC claims.

Background and objectives

The aim of this research was to understand claimants’ experience of being self-employed and claiming Universal Credit. It involved three main phases:

• Sep-Nov 2020: Wave 1 Survey
• Sep-Nov 2021: Wave 2 survey
• Jan-Mar 2022: Qualitative follow-up

The key objectives of the research were to:

• Understand who the claimant groups are and the nature of their self-employed work
• Understand claimants’ plans, barriers and support needs to making the most of their self-employed work, and the differences between groups

Sample

The research focused on two distinct groups of claimants:

• Existing 2020 claimants who started claiming UC as a self-employed person before 16 March 2020. This group took part in the Wave 1 and Wave 2 survey. This group had been assessed by Jobcentre Plus for their self-employment, had attended a gateway interview, and may have had the MIF applied.
• New claimants who started claiming UC after the 16 March 2020
• New 2020 claimants who started claiming UC as a self-employed person between 16 March and 22 June 2020.

This group took part in the Wave 1 and Wave 2 survey.

• New 2021 claimants who started claiming UC as a self-employed person between 23 June 2020 and 7 July 2021. This group took part in the Wave 2 survey only.
• This group may not have been assessed by the Jobcentre Plus for their self-employment and therefore may not have been deemed gainfully self-employed. Due to the pandemic, conditionality was temporarily suspended, halting gateway interviews and implementation of the MIF.

Methodology

Wave 1 – 18 September to 2 November 2020

• 5,159 existing 2020 UC claimants and 5,062 new 2020 UC claimants completed the online or telephone survey

Wave 2 – 10 September to 21 November 2021

• Recontacted from Wave 1 1,411 existing 2020 claimants and 1,331 new 2020 claimants completed the online or telephone survey
• 1,953 new 2021 claimants
• A snapshot of all the new 3,284 claimants who started claiming after the pandemic is included in the Appendix

Qualitative – January to March 2022

• 55 in-depth interviews with participants from Wave 2
• 28 existing claimants
• 27 new claimants (both recontacted and new 2021)

Methodology – Weighting and segmentation approach

Weighting

Data has been weighted by age, gender, whether claimants have children and single/couple claim. The recontacted sample is weighted to the original population profiles. The new 2021 sample is weighted to the sample proportions supplied. The combined new sample has a secondary weight to reflect the profile of the new population.

Segmentation

Both existing 2020, new 2020, and new 2021 UC claimants have been segmented into one of five groups. Cluster analysis was undertaken on eight attitudinal statements measuring respondents’ interest in self-employment, knowledge of sources of advice and guidance to support self-employment as well as their own financial health. For some findings there was a statistically significant increase or decrease from Wave 1. These significant differences are explained beneath the relevant graph or chart.

2. Nature of self-employed work

The majority of existing 2020 and new 2020 claimants are only carrying out self-employed work, but there was a rise in proportion of those also working for an employer.

Which, if any, of the following are you currently doing to earn money?

Recontact ‘existing 2020’

How you’re earning money	Wave 1 (Sep to Nov 2020	Wave 2 (Sep to Nov 2021)
Self-employed work only	88%	86%
Working for an employer only	1%	1%
Doing both self-employed work and working for an employer	5%	8%
Not in any paid employment or self-employment	6%	5%

Recontact ‘new 2020’

How you’re earning money	Wave 1 (Sep to Nov 2020	Wave 2 (Sep to Nov 2021)
Self-employed work only	82%	86%
Working for an employer only	2%	2%
Doing both self-employed work and working for an employer	4%	10%
Not in any paid employment or self-employment	13%	3%

There was a statistically significant increase in claimants who reported that they were doing both self-employed work and working for an employer. For the recontacted existing 2020 claimants, this proportion increased from 5% to 8% and amongst the recontacted new 2020 claimants this increased from 4% to 10%.

The recontacted new 2020 claimants also experienced other statistically significant changes between Waves 1 and 2:

• the number of new claimants who are not in any paid employment or self-employment decreased from 13% (Wave 1) to 3% (Wave 2)
• there was an increase in the number of new claimants who only did self-employed work in Wave 2 (86%) compared to Wave 1 (82%). These claimants reported feeling more confident in their ability to be successful in their self-employment, expect growth, and move off UC. There was also an increase in claimants under 34 years old in this group that reported only doing self-employed work.

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

The increase in proportion of new 2020 claimants is driven by men, those mainly working for an employer, and younger claimants.

25–34-year-olds in the recontacted existing 2020 group were more likely to be both self-employed and employed, rising from 14% in Wave 1 to 31% in Wave 2.

Among the recontacted new 2020 group, the following subgroups were more likely to be both employed and self-employed:

• 55% of men (rising from 47% in Wave 1)
• 53% of those that mainly worked for an employer (rising from 32% in Wave 1)
• 35% of 25–34-year-olds (rising from 31% in Wave 1)

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

Around 1 in 10 claimants have changed sector or the type of work they do since Wave 1.

Since we spoke to you last year, have you changed any of the following?

Recontact ‘existing 2020’

Type of change	Yes	No
The sector you work in	9%	91%
The type of self-employed work you do	14%	86%

Recontact ‘new 2020’

Type of change	Yes	No
The sector you work in	9%	91%
The type of self-employed work you do	12%	88%

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2: 1,331).

Claimants self-employed for less than 12 months are more likely to have changed sector and type of work.

Some groups are more likely to have changed sector since Wave 1:

• Among the recontacted existing 2020 group
  • Those that have been SE for less than 12 months (52%)
  • Those that plan to be SE in a different line of work in 6 months’ time (32%)
  • Those that plan to work for an employer in 6 months’ time (23%)
• Among the recontacted new 2020 group
  • Those that have been SE for less than 12 months (66%)
  • Those that plan to be SE in a different line of work in 6 months’ time (32%)
  • Those that plan to work for an employer in 6 months’ time (17%)

Some groups are more likely to have changed type of work since Wave 1:

• Among the recontacted existing 2020 group
  • Those that have been SE for less than 12 months (56%)
  • Those that plan to be SE in a different line of work in 6 months’ time (41%)
• Among the ‘recontacted new 2020 group
  • Those that have been SE for less than 12 months (72%)
  • Those that plan to be SE in a different line of work in 6 months’ time (43%)

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

The sectors which have seen the biggest change are personal services, beauty, sport and fitness.

What is your main self-employed work?

Recontact ‘existing 2020’

Type of self-employment	Wave 1 (Sep to Nov 2021)	Wave 2 (Sep to Nov 2021)
Domestic/utilities/vehicle services	23%	22%
Professional services	17%	14%
Transport/distribution/delivery	14%	14%
Manufacturing/construction/engineering	8%	7%
Media/telecoms/arts	8%	7%
Social care/healthcare/education/childcare	8%	7%
Personal services/beauty/sport and fitness	8%	5%
Retail/sales	5%	4%
Food/drink/hospitality/leisure	3%	4%
Animals/agriculture	3%	0%

Recontact ‘new 2020’

Type of self-employment	Wave 1 (Sep to Nov 2021)	Wave 2 (Sep to Nov 2021)
Domestic/utilities/vehicle services	18%	18%
Manufacturing/construction/engineering	13%	13%
Media/telecoms/arts	13%	13%
Professional services	13%	11%
Transport/distribution/delivery	12%	11%
Social care/healthcare/education/childcare	10%	7%
Personal services/beauty/sport and fitness	10%	6%
Food/drink/hospitality/leisure	4%	3%
Retail/sales	2%	2%
Animals/agriculture	2%	0%

There was a statistically significant decrease across four sectors between Wave 1 and Wave 2.

• The proportion of recontacted existing 2020 claimants in professional services decreased significantly from 17% to 14%.
• The proportion of claimants who work in personal services/beauty/sport & fitness decreased from 8% to 5% amongst the recontacted existing 2020 group and from 10% to 8% amongst the recontacted new 2020 group.
• The proportion of recontacted new 2020 claimants working in social care/healthcare/education/childcare decreased from 10% to 7%.
• The proportion of claimants who work with animals/in agriculture decreased from 3% to 0% and from 2% to 0% for the existing 2020 and new 2020 claimant groups, respectively.

Percentages on the graph are top net values. Net values are percentage values for each response are summed to broader categories.

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

However, there were not significant changes reported in the type of work that claimants are doing.

Which of the following describe any self-employed work you do?

Recontact ‘existing 2020’

Type of self-employment	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Business owner/director	55%	53%
Freelancer	34%	33%
Sub-contractor with a fixed schedule	10%	11%
Work shifts of varying lengths and timeslots for another business	10%	11%
Other	9%	8%

Recontact ‘new 2020’

Type of self-employment	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Business owner/director	45%	44%
Freelancer	35%	36%
Sub-contractor with a fixed schedule	20%	21%
Work shifts of varying lengths and timeslots for another business	9%	9%
Other	9%	8%

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

Financial situation has significantly improved, with fewer reporting some form of financial difficulty.

Thinking about the last two months, which one of the following statements best describes how well you have been keeping up with your bills and credit commitments? (Timescale: approx. July-Sept 2021/2022)

Recontact ‘existing 2020’

Financial situation	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Keeping up – no difficulty	13%	19%
Keeping up – struggle from time-to-time	33%	38%
Keeping up – constant struggle	26%	21%
Falling behind – some bills	13%	12%
Falling behind – many bills	11%	7%
No bills or commitments	1%	0%

Recontact ‘new 2020’

Financial situation	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Keeping up – no difficulty	14%	29%
Keeping up – struggle from time-to-time	32%	38%
Keeping up – constant struggle	30%	18%
Falling behind – some bills	12%	7%
Falling behind – many bills	10%	7%
No bills or commitments	0%	0%

There were statistically significant changes between Wave 1 and 2 among the recontacted existing 2020 claimants:

• Those that reported no difficulty keeping up with bills and credit commitments increased from 13% to 19%
• The percentage that reported struggling to keep up with bills from time to time increased from 33% to 38% • Those that reported it being a constant struggle to keep up with their bills and credit commitments decreased from 26% to 21%
• Those that reported falling behind and had many bills decreased from 11% to 7%

There were also statistically significant changes between Wave 1 and 2 among the recontacted new 2020 claimants:

• Those that reported no difficulty keeping up with bills and credit commitments increased from 14% to 29%
• Those that were mostly keeping up but struggled from time to time increased from 32% to 38%
• Those that reported keeping up as a constant struggle decreased from 30% to 18%
• Those that reported falling behind on some bills decreased from 12% to 7%
• Those that reported falling behind with many bills decreased from 10% to 7%

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

Qualitative findings showed the reason for claiming UC normally varied by date of claim.

Typically, longer term self-employed claimants initially claimed UC because they were operating at a lower economic level, whilst newer claimants were generally impacted by the pandemic.

The following findings are differentiated by the subgroup of claimant they apply to.

Recontacted existing 2020 claimants (claimed UC before 16 March 2020)

• UC is a buffer while new business is established (sometimes triggered transition from legacy benefits)
• Low income – from self-employment generally due to the type of work/lower paid sectors, or not charging enough
• Seasonal work – self-employment drops off in certain periods
• Brexit – people spending less
• Loss of financial security due to personal circumstances – poor health, split from partner, partner loss of job etc.

Recontacted new 2020 claimants (claimed UC 16 March – 22 June 2020)

• Financial impact of the pandemic on self-employed businesses – if recent self-employment not eligible for SEISS (others claimed SEISS and UC)
• Personal circumstances – e.g. limited ability for work as became a full-time carer New 2021 claimants (claimed UC from 23 June 2020)
• UC a buffer while new business established – made redundant from employment due to pandemic
• Living off savings that later ran out – need support due to pandemic
• Loss of financial security due to personal circumstances – partner loss of job (redundant due to pandemic), partner on low-pay (maternity), split from partner

No longer claiming UC

10% of existing 2020 claimants and 48% of the new 2020 claimants responded yes to the question “Are you currently claiming Universal Credit (UC)?”

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

Improved earnings and change of circumstances are the top reasons for moving off Universal Credit since Wave 1.

Why are you no longer claiming Universal Credit?

Reasons for not claiming UC	Recontact ‘existing 2020’	Recontact ‘new 2020’
I earn enough not to claim UC	54%	51%
Change of circumstances/no longer eligible	39%	39%
Another reason	18%	21%
Claiming UC was too complex/lack of support with the process	12%	6%
Lack of financial support from UC	7%	6%
Lack of support to grow earnings	4%	1%
Don’t know	1%	0%

Base: All existing claimants before 16 March 2020 (W2: 148) and new claimants between 16 March and 22 June 2020 (W2: 621) no longer claiming UC.

The longer term self-employed are more content with their situation, with fewer discontented existing 2020 claimants at Wave 2.

Type of situation	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Passionate, knowledeable and successful	23%	24%
Passionate, knowledeable and struggling	19%	18%
Passionate and struggling	18%	16%
Content with other priorities	15%	20%
Discontented	18%	16%

There was a statistically significant increase in the proportion of existing claimants that were content with other priorities, rising from 15% in Wave 1 to 20% in Wave 2. Of this group, 23% had been self-employed for over 5 years.

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

Nearly a third of new 2020 claimants now feel passionate and successful about their SE work. However, around a fifth feel dispassionate with other priorities.

Type of situation	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Passionate and successful	20%	32%
Passionate and struggling	22%	19%
Content with other priorities	16%	17%
Dispassionate with other priorities	11%	17%
Dispassionate and stuck	16%	12%

• There was a statistically significant increase in the proportion of new 2020 claimants reporting feeling passionate and successful in their work – from 20% in Wave 1 to 32% in Wave 2. Two subgroups were more likely to feel passionate and successful: those who were not currently claiming UC (38%) and those without caring responsibilities (33%).
• There was a statistically significant decrease in the proportion of those that felt passionate but were struggling, from 22% in Wave 1 to 19% in Wave 2.
• There was a statistically significant increase in the proportion of those that felt dispassionate with other priorities, from 11% to 17% since Wave 1.Some groups were more likely to be ‘dispassionate with other priorities’: those who work for another business (26%) and subcontractors (24%).
• There was a statistically significant decrease in the proportion of participants feeling dispassionate and stuck in self-employment, from 16% to 12% by Wave 2.

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331).

3. Motivations and attitudes

Flexibility remains the biggest motivator for doing self-employed work, particularly for those with children.

What motivated you to take up this self-employed work, rather than doing a different self-employed activity or working for an employer /increasing your employed work?

Recontact ‘existing 2020’

Motivations for self-employment	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Flexibility	49%	50%
Personal circumstances	39%	38%
Financial or economic reasons	32%	30%
To do with the line of work	26%	26%
COVID-19/coronavirus or lockdown	9%	10%
Another reason	44%	44%

Recontact ‘new 2020’

Motivations for self-employment	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
Flexibility	47%	48%
To do with the line of work	37%	37%
Financial or economic reasons	29%	28%
Personal circumstances	39%	38%
COVID-19/coronavirus or lockdown	9%	9%
Another reason	40%	42%

Percentages on the graph are top net values. Net values are percentage values for each response are summed to broader categories. In Wave 2, 44% of the recontacted existing 2020 group reported ‘another reason’ as their motivation for taking up self-employed work. Of this 44%:

• 22% wanted to start their own business
• 8% wanted to try something new
• 13% said that SE was a personal hobby
• 3% had trained or were qualified for their work

In Wave 2, 42% of the recontacted new 2020 group also reported ‘another reason’ as their motivation for taking up self-employed work. Of this 42%:

• 17% wanted to start their own business
• 7% wanted to try something new
• 14% said that SE was a personal hobby
• 2% had trained or were qualified for their work

Base: All existing claimants before 16 March 2020 (W1: 1,404; W2: 1,407) and new claimants between 16 March and 22 June 2020 (W1: 1,325; W2: 1,328) excluding those not started self-employment.

Breakdown of reasons for existing 2020 claimants. Some groups are more likely to be motivated by these factors.

50% of existing claimants reported flexibility as the biggest motivator for taking up self-employed work. This included:

• 34% of existing claimants who wanted more flexible hours generally
• 34% of existing claimants who wanted to be independent, wanted to be their own boss, liked the freedom of self-employment or liked making their own decisions

Some subgroups of existing claimants were more likely to say flexibility was the biggest motivator for taking up self-employed work:

• 59% of 25–34-year-olds
• 55% of women
• 52% of those with children

38% of existing claimants reported their personal circumstances as being the biggest motivator for taking up self-employed work. This included:

• 26% of those working around childcare or other caring commitments
• 14% of those working around a health issue
• 2% of those who joined their family business

Some subgroups were more likely to say personal circumstances were their biggest motivator for taking up self-employed work:

• 54% of women
• 41% of those with children
• 61% of those who worked in retail and sales
• 50% of those who worked in social care, healthcare, education, and childcare

Base: All existing claimants before 16 March 2020 (W1: 1,404; W2: 1,407) excluding those not started self-employment.

Breakdown of reasons for new 2020 claimants. Again, some groups are more likely to be influenced.

48% of new claimants reported flexibility as the biggest motivator for taking up self-employed work. This included:

• 36% who wanted to be independent, wanted to be their own boss, liked the freedom of self-employment, or liked making their own decisions
• 32% who wanted more flexible hours generally

Some subgroups were more likely to say flexibility was the biggest motivator for taking up self-employed work:

• 56% of those that have been in self-employment for 2-5 years
• 53% of claimants with children

37% of new claimants reported their motivation for taking up self-employment was to do with their line of work.

This included:

• 35% who said it was normal for their line of work
• 3% who reported that their boss preferred them to be self-employed

Some subgroups were more likely to say self-employment being to do with their line of work was the biggest motivator. This included:

• 42% of those without children
• 47% of freelancers
• 43% of subcontractors
• 69% of those who worked in media, telecoms, and arts

Base: All new claimants between 16 March and 22 June 2020 (W1: 1,325; W2: 1,328) excluding those not started self-employment.

Qualitative findings showed there are similarities in the core reasons the self-employed choose the work they do.

Lifestyle

Choosing own hours gives people flexibility to work around family life, caring commitments, and to manage health conditions.

Nature of work

There is a lack of employed jobs in some sectors, meaning self-employment is the only viable option e.g. illustration or construction.

Financial control

Choice over what type of work to take and how much to charge, often earning more than a similar employed job. Money was often a secondary motivation, though it helps to feel stable.

Passion

People choose their self-employed work because they feel passionate about it and enjoy it.

Case study: flexibility for self-employment

Many claimants chose to go into self-employment due to the flexibility and control of being one’s ‘own boss’. Michael is in his early 30s and lives with his wife and two young children.

Michael first claimed Universal Credit in 2019 at the start of his business but is no longer claiming. He works in the personal services sector and has been self-employed for 1-2 years.

He was initially excited about being self-employed, but is now feeling the pressure due to the effects of the pandemic. He believes he is likely to start claiming again in the near future.

Before becoming self-employed, Michael was driving/doing delivery work on a PAYE basis. However, due to long hours and staffing issues, Michael found that he was starting to spend less time at home with his family and that his work/life balance wasn’t as he desired.

Due to this dissatisfaction, Michael decided that he wanted to leave his company and saw online that DWP would help support a move into self-employment through UC. He looked into it and decided to start a new business venture within the cleaning industry in 2019.

Before the pandemic, Michael’s business was making a steady income, however he feels that just as his business was beginning to gain at a sustainable level the pandemic arrived which led to a decrease in activity.

Male, 25-34, Suburban, Existing 2020 claimant, said.

Driving wagons, I never got to see the family. I wanted more flexibility… I was away from home a lot because the company was short staffed, regularly 15 hours a day. 12 hours was a short day. After two years of that I’d had enough. I never got to see the children. I say you’ve got two currencies in your life - money and time. That was too much time for not enough money.

This case study reflects a non-fictional participant. Their name and other personal details have been changed for anonymity purposes.

Overall, existing 2020 and new 2020 claimants are reporting significantly higher levels of control in their self-employment.

There were three statements that participants rated their levels of control over: (1) The number of hours you work each week. (2) When you undertake your work each week (i.e. the times of day or days of the week). (3) The way you work (e.g. how you can complete tasks or the order you complete them in).

Those described as having ‘high control’ reported having ‘a great deal’ [of control] over all three statements, those that had some control had different responses across the statements, and those that had no control said ‘none at all’ across all three statements.

Recontact ‘existing 2020’

Level of control	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
High control	25%	29%
Some control	72%	68%
No control	2%	2%
Don’t know	1%	1%

Recontact ‘new 2020’

Level of control	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021
High control	21%	25%
Some control	74%	72%
No control	4%	2%
Don’t know	1%	1%

Between Waves 1 and 2 there were some statistically significant changes amongst the recontacted existing 2020 claimant group:

• The percentage of those reporting high levels of control over their self-employment rose from 25% to 29%
• The percentage of those reporting some levels of control decreased from 72% to 68%

Amongst the recontacted new 2020 group, the statistically significant changes were:

• The percentage of claimants that reported having a high level of control over their work increased from 21% to 25%
• The percentage of claimants within the same group that reported no control over their work decreased from 4% to 2%

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2:1,331) excluding those not started self-employment.

Directors and freelancers are more likely to have a high level of control over their work.

Some participants reported having ‘a great deal of control’ over all three of the following statements: (1) The number of hours you work each week. (2) When you undertake your work each week (i.e. the times of day or days of the week). (3) The way you work (e.g. how you can complete tasks or the order you complete them in).

In the recontacted existing 2020 group, these participants included:

• 36% of directors
• 30% of freelancers
• 43% of claimants in the food, drink and hospitality sectors
• 43% of claimants who worked in personal services, healthcare, education and childcare

In the recontacted new 2020 group, these participants included:

• 36% of directors
• 37% of those who were passionate and succesful in their work

Base: All existing claimants before 16 March 2020 (W2: 1,407) and new claimants between 16 March and 22 June 2020 (W2: 1,328) excluding those not started self-employment.

Specifically, existing 2020 claimants report having more control over their hours and the way they work.

Currently, how much control do you have over the following in your self-employed work?

Amount of control	The number of hours you work each week	When you undertake your work each week (eg the times of day or days of the week)	The way you work (eg how you can complete tasks or the order you complete them in)
A great deal	41%	43%	53%
A fair amount	31%	29%	28%
A little	18%	16%	11%
None at all	7%	8%	5%
Don’t know	3%	4%	3%

There was a statistically significant increase in the number of existing claimants who said they had a great deal/fair amount of control over the number of hours worked each week, rising from 66% in Wave 1 to 72% in Wave 2. There was also a statistically significant increase in the number of existing claimants who said they had a great deal/fair amount of control over the way they work. This rose from 76% in Wave 1 to 81% in Wave 2.

Base: All existing claimants before 16 March 2020 (W1: 1,404; W2: 1,407) excluding those not started self-employment.

Similarly, new 2020 claimants also report having more control over their hours and the way they work.

Currently, how much control do you have over the following in your self-employed work?

Amount of control	The number of hours you work each week	When you undertake your work each week (eg the times of day or days of the week)	The way you work (eg how you can complete tasks or the order you complete them in)
A great deal	38%	38%	48%
A fair amount	29%	30%	30%
A little	22%	19%	15%
None at all	8%	10%	5%
Don’t know	2%	2%	2%

There was a statistically significant increase in the proportion of new claimants who said they had a great deal/fair amount of control over the number of hours worked each week, rising from 59% in Wave 1 to 67% in Wave 2. There was also a statistically significant increase in the proportion of new claimants who said they had a great deal/fair amount of control over the way they work. This rose from 73% in Wave 1 to 78% in Wave 2.

Base: All new claimants between 16 March and 22 June 2020 (W1: 1,325; W2: 1,328) excluding those not started self-employment.

Qualitative findings found increased optimism about self-employed work, but there remains caution, partly due to the cost-of-living crisis.

Lifestyle

• General satisfaction with work/life balance, main reason most choose self-employment
• Passionate about the type of work
• Less satisfaction with financial income, linked to pandemic

Optimism

• Some are already doing much better after the pandemic
• Others see opportunities to grow, so feeling optimistic about the future
• Others aren’t, partly due to rise in cost of living causing cautious spending behaviour, some considering alternative careers

Drive

• Some are happy with the level of work they have
• Others are driven to achieve more, and are working hard to achieve this e.g. by increasing marketing

Male, 35-45, rural/semi-rural, Existing 2020 claimant, said:

[There’s] definitely more work than 12 months ago. There’s some big jobs around that weren’t there a year ago. With Covid out of the way, things are getting back to normal. But will it last? I think it’s swings and roundabouts, the luck of the draw.

Male, 45+, suburban, New 2020 claimant, said:

I am more optimistic than I was 12 months ago. Covid is more under control, workplaces are opening up again… The next six months are worrying I think. Energy bills, food prices are rising, cost of living is my biggest concern. Yes, wages have increased but there is still a gap to how much prices have gone up.

Case study: increased optimism

Some claimants showed great flexibility, adjusting their self-employment when the pandemic hit their business. Helen is in her early 50s and lives with her partner and two young children. She has been self-employed for 1-2 years. She claimed Universal Credit in late 2020 after an accident at work which prevented her from working. She is no longer claiming UC as she and her partner earn enough. She works in the food and drink products sector and has been self-employed for 1-2 years.

Helen and her partner previously worked at festivals in a food van selling deserts and vintage confectionary. When the pandemic hit, they moved the business online and offered the food van services to driveways and the roadside. Business uplifted during the pandemic as their services were in demand and they became well known. Competition is now growing as events are increasing. Helen finds the profit margins of the online business more difficult due to competition, and the roadside business is unique so they can charge more. The pandemic forced Helen and her partner to re-think their festival business, which was not financially viable. Because of this, they are feeling optimistic about the future, despite competition, and are working on their marketing strategies.

Female, 45-54, Suburban, Existing 2020 claimant, said:

Looking back at [the festivals], though we loved it, we struggled [financially], it was a hard life. You did it for enjoyment, being with your family, earning a little bit of money, not a lot of money… Whereas now I’m living my life and earning the money, and I can see the money and the potential I’ve got ahead of me and what I can do with it. I’m more driven now. Whereas previously it’s what I’d done for 10 years and I just carried on doing it and falling down the same pit hole. I just carried on with it because that’s what I knew.

This case study reflects a non-fictional participant. Their name and other personal details have been changed for anonymity purposes.

Working hours amongst existing 2020 claimants have returned to pre-lockdown levels.

Just before the UK went into lockdown in March 2020, how many hours a week did you normally spend on your self-employed work? / Currently, how many hours a week do you normally spend on your self-employed work? (Measured at Wave 1 and Wave 2)

Number of hours a week	Before lockdown	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
0 to 10	7%	14%	8%
11 to 20	15%	16%	14%
21 to 30	16%	16%	18%
31 to 40	25%	18%	25%
41+	25%	21%	24%
Varies too much	9%	15%	10%

Statistically significant differences between Wave 1 and Wave 2 can be seen in:

• Those that worked 0-10 hours significantly decreased from 14% to 8%
• Those that worked 31-40 significantly increased from 18% to 25%
• Those that couldn’t specify their hours as they varied too much decreased from 15% to 10%

Base: All existing claimants before 16 March 2020 (W1: 1,404; W2: 1,407) excluding those not started self-employment.

A similar pattern is seen amongst new 2020 claimants.

Just before the UK went into lockdown in March 2020, how many hours a week did you normally spend on your self-employed work? / Currently, how many hours a week do you normally spend on your self-employed work? (Measured at W1 and W2)

Number of hours a week	Before lockdown	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
0 to 10	5%	15%	8%
11 to 20	9%	14%	10%
21 to 30	13%	13%	15%
31 to 40	27%	19%	25%
41+	34%	22%	28%
Varies too much	10%	16%	14%

Statistically significant differences between Wave 1 and Wave 2 can be seen in:

• Those that worked 0-10 hours decreased from 15% to 8%
• Those that worked 11-20 hours decreased from 14% to 10%
• Those that worked 31-40 increased from 19% to 25%
• Those that worked 41 hours or more increased from 22% to 28%
• Those that couldn’t specify their hours as they varied too much decreased from 16% to 14%

Base: All new claimants between 16 March and 22 June 2020 (W1: 1,325; W2: 1,328) excluding those not started self-employment.

Subgroups of existing 2020 and new 2020 claimants working more hours at Wave 2.

The groups more likely to work 31-40 hours (n=353) among the recontact existing claimant group are:

• 31% of those in SE for 5+ years
• 29% of men
• 27% without a mental health condition
• 29% couple claim
• 38% in manufacturing, construction, and engineering

Some groups within the recontact existing claimants were more likely to work 41+ hours (n=331):

• 29% men
• 27% couple claim
• 39% in retail and sales, and 34% in food, drink, hospitality, and leisure

In the recontact new 2020 group, the following were working 31-40 hours (n=327):

• 12% women
• 35% vocational qualifications (NVQ 1&2)
• 26% without a physical health problem/disability
• 26% without a learning difficulty

Some groups within the recontact new claimants were working 41+ hours (n=366):

• 34% of directors and 34% of subcontractors
• 33% men
• 60% in food, drink, hospitality, and leisure and 43% in manufacturing, construction, and engineering

Base: All existing claimants before 16 March 2020 (W2: 1,407) and new claimants between 16 March and 22 June 2020 (W2: 1,328) excluding those not started self-employment.

4. Experience claiming UC

Claimants found out they were eligible for Universal Credit in various ways.

This was mostly consistent despite date of claim, though ‘new’ claimants who claimed after the pandemic were especially likely to search online for help available or be receptive to the increased media drive.

Friends/family:

• Informed that UC provides support for the self-employed, sometimes through personal experience. Subheading: Organizations
• External organisations, such as Citizen’s Advice Bureau, informed people they could claim UC as a self-employed person.

Government

• Informed by HMRC/DWP they needed to transition from legacy benefits – UC payment not guaranteed.

Online

• Searched online to find help for the self-employed, especially during the pandemic.

News/media

• Increased attention during the pandemic, in the news and Downing Street briefings.

Many felt the initial application process was easy and straightforward.

• Fairly straightforward onboarding journey – claimants found the online application easy to complete and Jobcentre staff helpful.
• However, some found it harder to know how to claim online, and one person mentioned the online forms didn’t feel relevant for the self-employed.
• Typically, the application and assessment process was regarded more favourably by more confident claimants and those with a higher socio-economic situation.
• Claimants were surprised it was a positive and supportive experience, partly due to negative media attention.

Fairly straightforward process.

Male, 45+, suburban, New 2020 claimant, said.

We’d never done it before, so we didn’t know if we were even eligible for anything. It was a phone call we made, we got through quickly… We did explain our situation, they said that was ok, we could register… They explained about the portal, that we should write down everything we’d done on that every month, what we’d spent on this, that and the other, and report it all. Overall, we found it quite easy to register.

Female, 45+, suburban, New 2020 claimant, said.

Although some found it a bit tedious: “We applied online, as the Job Centre was closed. The process was ok, not horrendous but a bit long winded trying to understand what to do. Normally you would have had to go into the job centre with some different documents. But you could just claim as everything was suspended.

Suggested improvements included claim logistics, alignment to HMRC processes and emotional connections.

Time lag for first payments

• Some had to wait for 8 weeks before receiving their first UC payment.

More alignment to HMRC:

• Challenging to run UC claim alongside HMRC self-assessments

Location and time of JCP appointments

• Difficult to take time out of working day.
• Travelling to JCP, especially in rural areas.

Male, 35-45, semi-rural, Existing 2020 claimant, said.

Sort of annoying. I had to take time off from my business. They needed to see the financials, I had to take things in to prove to them that I was eligible. It takes me an hour to get to the job centre, an hour for the interview, an hour home. So, three hours off work, missing out on earning, which I will not get back.

Emotional connection

• Feeling JCP staff questioned their SE work, with push to move to employed work – more understanding of personal experience, especially as businesses recover.
• Some felt embarrassed or judged for making a claim by their peers.

Male, 17-35, suburban, Existing 2020 claimant, said:

Generally, the people are lovely, the people you speak to. It depends on who you get. Sometimes, if you’ve got an issue, depending on who you get, the attitude they can have comes across a bit like, I dunno. It can make you feel like you’re not doing enough or you’re just another person on benefits.

Female, 35-44, rural/semi-rural, New 2021 claimant, said:

They did make us feel a bit like we shouldn’t be self-employed. We were constantly getting work search phone calls, and what were we doing about work, and were we looking for work. And we were like, well we’re self-employed and our contracts are coming back up. My business was growing, I was getting to a point where I was earning £7-£800 a month, which wasn’t a lot, but it was coming up slowly from something I’d built from nothing in a lockdown.

Claimants would prefer consistency in their Work Coach, and for them to have specialist SE knowledge.

Lack of consistency in Work Coach

• Claimants often see multiple Work Coaches over their claim. This presents less of a tailored experience.
• Work Coaches were viewed as a contact – rather than someone to provide valuable, specific support.
• Post-pandemic claimants have less frequent contact.

Differing levels of knowledge

• Some Work Coaches are more knowledgeable than others.
• There appeared to be a lack of specific knowledge in SE or niche sectors
• “One size fits all” approach made some feel pressured to find any work, rather than those they had passion, skills or experience in.

Not meeting support needs

• Claimants find it hard to articulate the help they need. Less experienced claimants have difficulty expressing why they don’t know what they need. Information is sometimes outdated. Varied support needs:
  • Longer term claimants have a business/‘entrepreneur’ mindset and are more savvy than new claimants.
  • Life stage (e.g. older claimants finding it more difficult to make a change).

Lack of specialist expertise

Male, 35-44, Urban, New 2021 claimant, said:

The impression I get is that the front-line people are there to do a job. I think they’d be helpful if you were looking for a job but they can’t do a lot for me. The thing I want help with, that’s funding for the business, they can’t help with that. And if you’re the kind of business that needs to get its name out, with fliers for example, they can probably help with that. They tried to give me advice on my website but they know nothing about the motor trade, so that was no help at all. Really, I’d say their expertise in advising a business like mine is not that great, they don’t really have a clue.

Case study: need for support

Some claimants feel that their Work Coaches weren’t able to provide specific self-employed support. Amelia is in her early 30s and lives with her partner and three young children. She has been self-employed for 2-3 years. She claimed Universal Credit in late 2019 after a government transition from Child Tax Credits. Once her start-up period ends soon, she expects not to be claiming UC as she will be earning over the threshold. Amelia chose to complete a nail technician course as it was the easiest/quickest course to complete with 2 young children. However, Amelia didn’t pursue this career to begin with due to competition in the large city where she lived. More recently, Amelia and her partner moved to a rural area where there was less competition. She saw a need for her services and was thus able to build up her beauty business. Though Amelia is in a start-up period, she felt her Work Coach wasn’t knowledgeable about self-employment. They couldn’t offer help or guidance even with simple questions (e.g. how to do tax returns), she received no signposting to local business advice/support, and received no help when she tried to open a shop before the pandemic.

Female, 25-34, rural/semi-rural, Existing 2020 claimant, said:

[I’d like] for people to be there and tell you how to organise everything, what receipts to keep, whether you need to include VAT on the receipts, how you should be separating your money in order to have a successful business, having a Work Coach to support you if you have any questions rather than having to wait for the interview, talking you through a business plan. Things like that would have helped massively because I would have gone into this knowing exactly what I wanted out of it rather than going into it blind.

This case study reflects a non-fictional participant. Their name and other personal details have been changed for anonymity purposes.

The frequency of contact with Work Coaches is also varied, but telephone contact is preferred.

Frequency of contact

• Frequency of contact was reduced during the height of the pandemic for those already claiming UC.
• Frequency varied; it could be monthly, quarterly, and ad hoc. All of these options were mentioned.

Type of contact

• Telephone communication was preferred, as it was seen as time efficient – shorter calls (10 minutes).
• Online/journal – information often has to be repeated.
• Face to face contact at JCP takes time out of business – no allowance for loss of earnings.

“Sometimes you went in and it was literally 5 minutes. So I’d walk there, it’d take me 20 or 25 minutes to walk there and back, and I was literally in for 5 minutes and I thought ‘why couldn’t they have done that on the journal or on the phone?” (Female, 45+, suburban, Existing 2020 claimant).

Claimant commitment

• Recognised by most as the tasks they needed to complete, including regularly checking the journal.
• However, some did not feel like their health condition/situation was fairly taken into account.
• Some participants did not recognise the term at all.

Female, 35-45, urban, Existing 2020 claimant, said:

[A claimant commitment is] Basically what my obligations are. I need to provide them with information on my income and expenses, attend interviews. You generally have to be seen to making some level of effort.

Some felt their personal situation was not always considered

Male, 35-44, urban, New 2021 claimant,said:

They didn’t understand about the special guardianship arrangement. My father found it out that they’d got it wrong and were underpaying us for the number of children under 16 years old in the household.

However, some claimants are not aware of any interaction with a Work Coach

• Some claimants don’t recognise the contact they have at JCP as being from a ‘Work Coach’, or some have very limited contact with JCP at all.
• Some claimants are not aware of the Work Coach role and the support they can provide, rather see them as a quick check-in about what they’re doing and earning.
• As well as new claimants, there’s also evidence some existing claimants were unaware of the Work Coach role, suggesting low awareness may have existed before the pandemic.

Lack of awareness of a Work Coach.

Male, 17-35, suburban, Existing 2020 claimant, said:

It’s not as though I feel I have a dedicated contact online. So I don’t think – ‘I need to contact so and so about this’, it’s much more, I need to give universal credit a ring. Or I put a note on my journal. I don’t know who my work coach is.

Role of the Work Coach.

Male, 17-35, urban, New 2020 claimant, said:

They just seemed to be there for administration, some basic admin tasks and checking how it was going… It was just a check, making sure I’d met my commitments and seeing how it was going. Has anything changed in your claim they need to know about, that sort of thing. So, I think they called me about twice a month just to check in.

Hard to recognise the ‘gateway interview’ as a discreet part of the process.

Low awareness of terminology and process

• Some claimants were unsure if they’d had a gateway interview.
• Some understood they’d been assessed as they showed documentation to evidence the business, but did not see it as a ‘key’ part of the claiming process.
• Low level of understanding meant some claimants felt they were being assessed personally, with some reporting they were made to feel uncomfortable.

Knowledge of the outcome varied

• Some claimants remember being told they were deemed gainfully self-employed (GSE).
• Others weren’t sure what GSE meant but, for example, remember being told their business is viable.
• Those aware that they were deemed GSE felt more positive about the experience and their SE activity overall.

Gateway Interviews – key factors impacting how customers feel.

Knowledge/awareness

• Those who felt clearly informed of the process felt more confident overall.
• Those less informed felt muddled/confused about what had taken place and what the outcome was.

Life stage

• Older claimants (45+) more likely to be dissatisfied by this process, despite GSE outcome.
• Reporting that they often felt like they had to ‘justify’ or ‘prove’ themselves.

Older claimant deemed not GSE: “You feel you’re being judged on what you should be doing. Being told you’re not self-employed does kind of get to you after being self-employed for such a long time.” (Female, 45+, Suburban, Recontact 2020 claimant).

Older claimant deemed GSE: “It feels like you have to keep proving yourself all the time, they question your choices.” (Female, 45+, Suburban, Recontact 2020 claimant)

Case study: The Gateway Interview

Though not many claimants saw the gateway interview as a key part of the claiming process, many do remember their self-employment activity being ‘assessed’ by JCP staff.

Alexandra is in her early 40s and lives alone. She has been self-employed for 3 years. She claimed Universal Credit in early 2020, before Covid, due to being impacted by Brexit. However, since then her claim has changed due to health purposes after contracting long covid. She is still currently claiming UC, but is optimistic that she will stop claiming in the near future as her business continues to grow.

Alexandra lives by herself and is a private mental health therapist and has always been self-employed. When the income from her SE therapy business began to dip, she decided to take on temporary work to get by but maintained her SE activity. Alexandra finds her work very rewarding and is more optimistic about her self-employment activity now than she was a year ago. She recalls the gateway interviewing process as multiple interviews where the job centre staff seek to ‘establish facts’ regarding her self-employment and found it an overall positive experience. She reports the staff being nice and informative and felt relieved and affirmed when told she was gainfully self-employed.

Female, 35-44, urban, Existing 2020 claimant, said:

I went to a couple of ‘establishing facts’ kind of interviews. That’s where you turn up with your passport and your rent agreement and so on. I took in evidence of my business, turnover, website, testimonials…they were like, ‘oh you’re doing really well, that’s so impressive.’ I turned up thinking I was going to get really grilled and it was going to be really difficult - and it really wasn’t. I was really worried before I went in and they were so nice to me.

This case study reflects a non-fictional participant. Their name and other personal details have been changed for anonymity purposes.

Mixed understanding of the MIF and whether it was applied to claim.

Low understanding of terminology

• Participants had varying degrees of knowledge around the MIF.
• Many were not aware of the exact terminology, but often felt familiar with the process once they heard the definition.
• Others were unsure what the MIF means and whether it’s applied to their claim.

Female, 45+, Suburban, New 2021 claimant, said:

I had heard of it but when they explained it I didn’t understand it. I cannot remember having it.

Unsure how the MIF is calculated

Participants had limited understanding about how the MIF is calculated, even more knowledgeable claimants.

• Some recognised it was linked to minimum wage.
• It was said to be hard to understand/ retain information about calculation, even from a Work Coach – especially with fluctuating earnings.

Male, 35-44, Urban, New 2021 claimant,said:

I think it’s worked out by looking at what the business has earned and what the expenses have been. It’s based on that - the bottom line, the business profit, whether there is any profit and what it is.

Some understanding of discretion

• Few claimants reported being provided some discretion around the MIF.
• A couple of claimants expressed having a further 2-month discretionary period applied to the MIF post Covid, with one claimant stating that they experienced a ‘rolling discretion’.

Female, 35-44, Semi-urban, Existing 2020 claimant,said:

I’m still on that minimum income floor…It’s lasted a long time…I think it’s only meant to last for 6 months, or 12 months? But because of the pandemic, it lasted all the way through…they said that it had been extended for me because I didn’t get a fair chance to begin with because of the pandemic…

Concerns about the MIF impacting business recovery, and low understanding/caution about reporting expenses Subheading: Application of MIF

• Some felt ‘on a cliff edge’ and like they needed to earn a certain amount, or face doing something else.
• Claimants felt applying the MIF post-Covid was not taking their personal circumstances into consideration – particularly in areas with less affluence.

Male, 45+, suburban, Existing 2020 claimant,said:

My business makes what £400, £500 a month. With that on top, after tax, I’d be making the minimum wage after tax. And they’re just going to take it all. I knew that at some point you were going to get into the minimum income floor, because it causes so much stress. I do wonder if it’s time to give up and just get a job.

Low understanding of what to include

• Claimants assume DWP and HMRC self-assessment are aligned – HMRC was seen as more authoritative.
• There was a lack of understanding about what to include. This led to worries they hadn’t been completed accurately – concerns around error/fraud.
• Claimants often used informal sources to see what others were doing – work coaches could explain more.

Male, 17-34, urban, New 2020 claimant, said:

When you’re on PAYE, DWP just take your reporting from HMRC and calculate your benefit. So, I can’t see why the minimum income floor ever existed. When you’re self-employed, you just manually report your income and expenditure. So, I was unsure as to why the process would ever be anything other than that.

Caution reporting expenses

• Some claimants cautious about how reporting could affect their UC payments and/or whether the MIF is applied to their claim.
• Reluctance to submit all expenses if this would lower income, close to MIF.

Male, 35-44, rural/semi-rural, Existing 2020 claimant, said:

It does state on there what you can claim for. But I don’t put down every expense, because that would lower the amount I’ve earned. Then I’d be getting close to the minimum income floor.

MIF – key factors impacting how customers feel

Knowledge/awareness

• Those who felt more informed about the MIF and how it is calculated felt less pressure about it being applied to their claim.
• Those less informed felt more confused and regarded the MIF as a ‘target’ to hit without understanding the consequences.

Financial situation

• The application of the MIF, especially post Covid, left many claimants feeling negative about their self employment activity.
• Claimants reported feelings of ‘fear’ and ‘dread’ around the MIF as they tried to rebuild their work post Covid.

MIF viewed as a barrier to claiming UC

Male, 17-35, urban, Recontact 2020 claimant, said:

I did go to make a claim earlier. This was before Covid, before they took away the MIF… They lifted a lot of those barriers, that helped me to claim – it being all over the phone was just so much easier, personally I found that a lot nicer. The whole minimum income thing had gone, which made it relevant for self employed people, I’m not sure how. It seemed really prohibitive.

Case study: Minimum Income Floor

For some claimants, having the MIF applied to their claim causes feelings of pressure. This feeling has been heightened since the pandemic as many try to rebuild their business.

Terri is in her mid-40’s and lives with her husband. She’s been self-employed for over 5 years. She has worked as a self-employed beautician for over 5 years and started claiming Universal Credit in 2020 as a result of lockdown and her business closing down. Currently, Terri’s SE activity is in a stage of rebuilding, but in the future she hopes that business will increase to pre pandemic levels and that she will no longer be on Universal Credit.

When Terri’s business was impacted by the pandemic, she had looked at what support was available on the internet and found UC to be the most appropriate support.

Terri didn’t recognise the ‘gateway interview’ process, though this may be due to the suspension of the process during the pandemic. However, she did report having ‘an assessment of whether she had SE status’ in December 2021.

Terri was aware of the MIF and had a vague understanding of how it worked. She reports that the MIF has made her situation more difficult and that the ‘judgement’ that came through the MIF process has left her feeling inclined to get a job for stability. She now has a job lined up at M&S.

Terri reports the MIF as having a negative impact on her motivation for SE work - in a tough month when she knows she is not going to make the threshold, it discourages her from working. She believes that it doesn’t recognise how people are trying to rebuild their business in the wake of the pandemic.

Female, 45+, suburban, New 2020 claimant, said:

Since that’s come in things have become more difficult… It’s daft that they’re imposing this when you’re trying to rebuild your business. Of course you’re not going to be earning a lot of money if you’re trying to build it back up again.

This case study reflects a non-fictional participant. Their name and other personal details have been changed for anonymity purposes.

5. Profits and future expectations

Profits for existing 2020 claimants have improved in Wave 2, with those making a loss/no profits decreasing by 10 percentage points. However, they’re still lower than pre-pandemic levels.

Profit or loss made	Pre-tax profit in August 2020	Pre-tax profit in August 2021	Typical pre-tax profit before lockdown
Made a loss	18%	11%	8%
£0	14%	11%	7%
£1 to £249	13%	8%	12%
£250 to £499	12%	9%	11%
£500 to £749	6%	7%	11%
£750 to £999	6%	7%	11%
£1,000 to £1,249	3%	5%	7%
£1,250 to £ £1,499	3%	4%	7%
£1,500 to £1,749	2%	2%	3%
£1,750 to £1,999	1%	2%	3%
£2,000+	4%	8%	8%
Don’t know	15%	22%	11%

Amongst existing claimants’:

• The percentage that made a loss or earned £0 in August 2021 significantly decreased from 32% to 22% compared to the year before. 15% reported this level of pre-tax profit before the lockdown.
• The percentage that reported monthly earnings over £1,000 in pre-tax profit in August 2021 significantly increased from 13% to 21% since August 2020. 28% reported this level of earnings pre-lockdown.

Base: All existing claimants before 16 March 2020, excluding those not started self-employment (W1: 1,404; W2:1,407) Before lockdown (W1: 1,381). ‘Prefer not to say’ and ‘not self-employed before March / in August’ codes not shown.

Profits for new 2020 claimants have also improved in Wave 2, with significant increases in those making £1,000+. However, they have yet to reach the pre-lockdown levels.

Profit or loss made	Pre-tax profit in August 2020	Pre-tax profit in August 2021	Typical pre-tax profit before lockdown
Made a loss	15%	9%	3%
£0	15%	8%	2%
£1 to £249	7%	5%	3%
£250 to £499	10%	7%	7%
£500 to £749	7%	7%	7%
£750 to £999	6%	5%	9%
£1,000 to £1,249	4%	5%	9%
£1,250 to £ £1,499	2%	5%	10%
£1,500 to £1,749	1%	3%	6%
£1,750 to £1,999	2%	3%	5%
£2,000+	8%	16%	22%
Don’t know	20%	23%	13%

The proportion of new claimants who earned between £1,000 and over £2,000 in pre-tax profit significantly increased from 17% in August 2020 to 32% in August 2021. Statistically significant changes in this group included:

• Those who earned between £1,250 and £1,499 increasing from 2% to 5%
• Those who earned between £1,500 and £1,749 increasing from 1% to 3%
• Those who earned over £2,000 increasing from 8% to 16%

52% of new claimants reported pre-tax profits of over £1,000 before lockdown.

Base: All new claimants between 16 March and 22 June 2020, excluding those not started self-employment (W1: 1,325; W2:1,328) Before lockdown (W1: 1,316).‘Prefer not to say’ and ‘not-self-employed before March / in August’ codes not shown.

Typically, higher levels of profit correlate to longer hours worked, but still higher levels reporting a loss, but working 41+ hours a week compared to pre lockdown.

Profit variation (August 2021) vs hours worked

Recontact ‘existing 2020’

Number of hours a week	Made a loss	£0	£1 to £499	£500 to £999	£1,000+
0 to 10	12%	32%	35%	12%	9%
11 to 20	12%	10%	38%	27%	13%
21 to 30	11%	15%	22%	25%	26%
31 to 40	10%	12%	19%	21%	38%
41+	9%	20%	14%	16%	15%	36%

Recontact ‘new 2020’

Number of hours a week	Made a loss	£0	£1 to £499	£500 to £999	£1,000+
0 to 10	23%	23%	28%	10%	15%
11 to 20	8%	13%	37%	21%	21%
21 to 30	9%	8%	15%	27%	40%
31 to 40	10%	8%	9%	14%	59%
41+	9%	12%	12%	9%	11%	57%

Base: All existing claimants before 16 March 2020, excluding those not started self-employment and DK/PNTS (W2:1,072); All new claimants between 16 March and 22 June 2020, excluding those not started self-employment and DK/PNTS (W2:949). Don’t know (DK) and prefer not to say (PNTS) are not shown – they have been excluded from the base.

Claimants show higher levels of profit pre lockdown compared to Wave 2, especially those working 31+ hours, with fewer claimants making a loss overall.

Profit variation pre-lockdown (March 2020) vs hours worked

Recontact ‘existing 2020’

Number of hours a week	Made a loss	£0	£1 to £499	£500 to £999	£1,000+
0 to 10	9%	26%	41%	12%	11%
11 to 20	4%	7%	43%	36%	10%
21 to 30	8%	5%	22%	43%	21%
31 to 40	9%	4%	26%	21%	40%
41+	11%	6%	18%	14%	51%

Recontact ‘new 2020’

Number of hours a week	Made a loss	£0	£1 to £499	£500 to £999	£1,000+
0 to 10	8%	13%	29%	20%	30%
11 to 20	5%	6%	27%	36%	26%
21 to 30	4%	3%	17%	25%	51%
31 to 40	2%	2%	7%	22%	67%
41+	4%	3%	5%	13%	76%

Base: All existing claimants before 16 March 2020, excluding those not started self-employment and DK/PNTS (W2:1202);All new claimants between 16 March and 22 June 2020, excluding those not started self-employment and DK/PNTS (W2 1091).Don’t know (DK) and prefer not to say (PNTS) are not shown – they have been excluded from the base.

Existing 2020 claimants are more positive about the future of their self-employment activity, with a significant shift in those expecting growth.

Compared to your current situation, what do you expect to happen to your typical monthly profit from self-employment in 6 months from now – that is, around February 2022? Do you expect it to … ?

Expected growth	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
Grow	46%	60%
Stay the same	16%	18%
Decline	14%	7%
Don’t know	24%	15%

There was a statistically significant increase in the proportion of new claimants who expected growth, rising from 46% in Wave 1 to 60% in Wave 2. The top sectors expecting growth amongst the recontacted existing claimants in Wave 2 are:

• Retail/sales (77%)
• Personal services/beauty/sport & fitness (74%)

Base: All existing claimants before 16 March 2020 who expect to be self-employed in 6 months’ time (W1: 1,366; W2: 1,322).

New 2020 claimants are a lot more positive about the future of their self-employment activity, with a significant shift in those expecting growth.

Compared to your current situation, what do you expect to happen to your typical monthly profit from self-employment in 6 months from now – that is, around February 2022? Do you expect it to … ?

Expected growth	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
Grow	31%	49%
Stay the same	17%	25%
Decline	24%	8%
Don’t know	28%	19%

There was a statistically significant increase in the proportion of new claimants who expected growth, rising from 31% in Wave 1 to 49% in Wave 2. The top sectors expecting growth amongst the recontacted new claimants in Wave 2 are:

• Professional services (55%)
• Transport/distribution/delivery (54%)

Base: All new 2020 claimants initiating their claim between 16 March-22 June 2020, who expect to be self-employed in 6 months’ time (W1: 1,285; W2: 1,255).

6. Plans for the future

Most existing 2020 claimants plan to stay self-employed in 6 months’ time.

In 6 months’ time:

• 85% of existing claimants plan to be doing the same self-employed work.
• 7% of existing claimants plan to be self-employed but in a different line of work.
• 5% plan to work for an employer. This is a significant increase from 3% in Wave 1.

When asked, ‘What are your reasons for aiming to leave self-employment within the next 6 months?’ the top net reason was income or affordability reasons (56%), decreasing from Wave 1 (58%). The second most common reason was Covid-19/Coronavirus or lockdown (24%), also decreasing from Wave 1 (55%).

Net values are percentage values for each response are summed to broader categories.

Base: All existing claimants before 16 March 2020 (W2: 1,411); All existing claimants before 16 March 2020 who expect to be working for an employer as their main activity in 6 months, or not in paid work, nor retired in 6 months (W2: 76).

Similarly, most new 2020 claimants also plan to stay self-employed in 6 months’ time. In 6 months’ time:

• 88% of new claimants plan to be doing the same self-employed work.
• 4% of new claimants plan to be self-employed but in a different line of work.
• 5% plan to work for an employer. This is a significant increase from 3% in Wave 1.

When asked, ‘What are your reasons for aiming to leave self-employment within the next 6 months?’ the top net reason was income or affordability reasons (49%). This was 59% at Wave 1. The second most common reason was personal circumstances, significantly increasing from 9% in Wave 1 to 28% in Wave 2.

Net values are percentage values for each response summed to broader categories.

Base: All new claimants between 16 March and 22 June 2020 (W2: 1,331); All new claimants between 16 March and 22 June 2020 who expect to be working for an employer as their main activity in 6 months, or not in paid work, nor retired in 6 months (W2: 70)

Overall existing 2020 claimants remain passionate and confident about their self-employed work.

To what extent do you agree or disagree with the following statements?

Feelings towards self-employment	Strongly agree	Tend to agree	Neither agree nor disagree	Tend to disagree	Strongly disagree	Don’t know
Passionate about	67%	20%	7%	3%	1%	2%
Confident to make a success of self-employment	56%	31%	8%	2%	2%	1%
Even if wanted to, unable to change current self-employment	19%	21%	18%	18%	21%	4%
Have goals more important than my self-employment	16%	18%	25%	19%	18%	4%
If had chance, I’d work for an employer	9%	8%	15%	19%	46%	4%

There was a statistically significant increase in existing claimants that disagreed with the statement ‘My self-employment activity is something I’m passionate about’ from 3% to 4% in Wave 2.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work, excluding those who haven’t started self-employment (W2: 1,327).

New 2020 claimants who are passionate about their self-employed work remains unchanged, with both confidence and wider goals significantly increasing in Wave 2.

To what extent do you agree or disagree with the following statements?

Feelings towards self-employment	Strongly agree	Tend to agree	Neither agree nor disagree	Tend to disagree	Strongly disagree	Don’t know
Passionate about	63%	23%	8%	2%	1%	1%
Confident to make a success of self-employment	55%	33%	6%	3%	2%	1%
Even if wanted to, unable to change current self-employment	19%	20%	18%	18%	22%	3%
Have goals more important than my self-employment	18%	21%	26%	19%	13%	3%
If had chance, I’d work for an employer	10%	9%	16%	16%	46%	3%

There were several statistically significant changes between answers in Wave 1 and Wave 2:

• Those that strongly agreed or tended to agree that they were confident in their ability to make a success of their self-employment increased from 85%to 88% in Wave 2.
• Those that strongly disagreed or tended to disagree that they were unable to change their current self-employment increased from 30% to 40% in Wave 2.
• Those that strongly agreed or tended to agree that they had wider life goals than their current self-employment activity increased from 31% to 39% in Wave 2.

Base: All new 2020 claimants initiating their claim between 16 March-22 June 2020 who are currently doing self-employed work, excluding those who haven’t started self-employment (W2: 1,274).

Qualitative findings show that overall, most are optimistic about the future but not certain.

Degree of confidence

• Claimants felt more optimistic as Covid restrictions eased. Some participants felt that growing their business was more viable in the face-to-face world.
• There was a feeling of ‘back to normal’ for some.

Passion remains

• Claimants had passion – many resigned to SE being high risk and unpredictable (e.g. arts/creatives).
• Claimants had a commitment to making self-employment work – they were reluctant to go into fulltime work as an alternative. This was seen as giving up on their preferred way of working (SE).
• Some participants carried out SE in addition to paid employment. This offered greater financial stability.

Challenges remain

• Rise of cost of living/energy prices was seen as a threat – there was a fear of what was around the corner and how much disposable income people would have.
• Claimants were on the brink of ‘making it’. They felt like their business was viable in the long term, but feared benefits would be cut off before success is seen.
• Claimants found it difficult to retrain/acquire new skills.

7. Barriers and support needs

Overall, market related barriers are not as significant as during Wave 1, as demand for services shows recovery from the pandemic.

To what extent, if at all, are each of the following stopping you from making the most of your self-employed work?

Recontact ‘existing 2020’

Barriers to self-employment	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Business related	52%	52%
Market related	57%	51%
Personal issues	43%	46%
Lack of training/skills	30%	34%

Recontact ‘new 2020’

Barriers to self-employment	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Business related	64%	53%
Market related	48%	47%
Personal issues	28%	32%
Lack of training/skills	26%	29%

Amongst the recontacted existing 2020 claimants, there were statistically significant differences between Wave 1 and Wave 2 in the following:

• Those citing market related barriers as a barrier to making the most of their self-employed work decreased from 57% to 51% in Wave 2.
• Those citing a lack of training/skills as a barrier to making the most of their self-employed work increased from 30% to 34% in Wave 2.

Amongst the recontacted new 2020 claimants, there was also a statistically significant change in those reporting market related barriers as a factor stopping them from making the most of their self-employed work. This decreased from 64% to 53% in Wave 2. Percentages on the graph are top net values. Net values are percentage values for each response summed to broader categories.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new 2020 claimants initiating their claim between 16 March-22 June 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Competition from others and not being able to raise prices are top barriers for longitudinal claimants.

To what extent, if at all, are each of the following stopping you from making the most of your self-employed work?

Recontact ‘existing 2020’

Problems being self-employed	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Competition from others	37%	34%
Not being able to raise prices	28%	31%
Lack of demand	40%	29%
Difficulty getting business loans or investment	30%	28%
Personal health issues	22%	26%
Difficulty finding childcare	20%	21%
Lack of support or mentoring	18%	21%
Not having suitable premises or location	20%	20%
Other caring responsibilities	15%	17%
Lack of digital skills	14%	16%
Lack of business skills	11%	14%
Lack of local transport links	7%	8%

Recontact ‘new 2020’

Problems being self-employed	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Competition from others	36%	35%
Not being able to raise prices	32%	31%
Lack of demand	49%	30%
Difficulty getting business loans or investment	21%	21%
Personal health issues	17%	19%
Difficulty finding childcare	15%	16%
Lack of support or mentoring	14%	15%
Not having suitable premises or location	12%	14%
Other caring responsibilities	10%	12%
Lack of digital skills	9%	12%
Lack of business skills	9%	11%
Lack of local transport links	7%	8%

Amongst the recontacted existing 2020 claimants, there were statistically significant differences between Wave 1 and Wave 2 in the following:

• Personal health issues as a factor preventing making the most of self-employed work increased from 22% in Wave 1 to 26% in Wave 2.
• Lack of business skills as a factor preventing making the most of self-employed work increased from 11% in Wave 1 to 14% in Wave 2.

Amongst the recontacted new 2020 claimants, these was a statistically significant change in those reporting ‘other caring responsibilities’ as a factor affecting their ability to make the most of their self-employed work. This increased from 9% in Wave 1 to 12% in Wave 2.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new claimants before 16 March 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Subgroups that are most likely to report barriers with significant movement from W1 to W2:

• Personal health issues are most likely to affect existing 2020 claimants who have a physical disability (60%) and/or a mental health condition (48%)
• Lack of business skills is most likely to affect existing claimants who are aged 25-34 (18%) and those with a physical disability (18%) and/or a mental health condition (20%)
• Other caring responsibilities is most likely to affect new 2020 claimants who are aged 35-44 (16%) and have children (18%).

Female, 35-44, Urban, Existing Claimant), said:

In the next six months I will look to consolidate and look to expand later on. The challenge for me is balancing my health against the demands of work.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new claimants before 16 March 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Over half of existing and new claimants agree that they know where to go for advice and guidance.

‘I know where I can go for advice and guidance to help me achieve my self-employment goals.’

Level of Agreement/disagreement	Existing claimants	New claimants
Strongly agree	28%	22%
Tend to agree	32%	33%
Neither agree nor disagree	16%	18%
Tend to disagree	12%	13%
Strongly disagree	8%	10%
Don’t know	5%	4%

19% of existing claimants and 23% of new claimants tended to disagree or strongly disagreed that they knew where to go for advice and guidance to help them achieve their self-employment goals.

There was, however, a statistically significant increase between Wave 1 and Wave 2 of the number of claimants agreeing that they knew where to go for advice and guidance to help them achieve their self-employment goals.

• For existing claimants, this increased from 55% to 60%.
• For new claimants, this increased from 52% to 55%.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new 2020 claimants initiating their claim between 16 March-22 June 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Claimants are still more likely to go to friends, family or peers for advice, though there has been a significant shift in those consulting Government agencies in Wave 2.

In the last 12 months, have you had any advice, guidance or support from any of the following to help you achieve your self-employment goals? Top 4 sources

Recontact ‘existing 2020’

Source of help	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Any friends or family members	42%	41%
Any peers who are self-employed or do the same line of work	41%	41%
Other govt agencies (eg DWP, JCP)	18%	22%
An accountant, bank manager or another finance professional	19%	20%

Recontact ‘new 2020’

Source of help	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Any friends or family members	40%	41%
Any peers who are self-employed or do the same line of work	46%	45%
Other govt agencies (eg DWP, JCP)	24%	24%
An accountant, bank manager or another finance professional	8%	18%

There was a statistically significant increase between Wave 1 and Wave 2 for the number of both existing and new claimants who received advice, guidance, or support from government agencies in the last 12 months.

• Amongst the recontacted existing 2020 claimants, this rose from 18% to 22%.
• Amongst the recontacted new 2020 claimants, this rose from 8% to 18%.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new 2020 claimants initiating their claim between 16 March-22 June 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Help regarding guidance on doing tax returns and reporting expenses remain top areas for claimants.

In which of the following areas, if any, would you find it helpful to receive advice and guidance for your self-employed work? Top 6 mentions.

Recontact ‘existing 2020’

Type of helpful advice/guidance	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Doing tax returns and reporting expenses to DWP or HMRC	45%	37%
Getting business loans or investment	43%	36%
How to move or promote your buiness online	44%	35%
Finding relevant training courses	34%	30%
Budget and financial management	35%	29%
How to comply with regulations	38%	28%

Recontact ‘new 2020’

Type of helpful advice/guidance	Wave 1 (Sep to Nov 2020 )	Wave 2 (Sep to Nov 2021)
Doing tax returns and reporting expenses to DWP or HMRC	38%	34%
Getting business loans or investment	33%	32%
How to move or promote your buiness online	39%	31%
Finding relevant training courses	33%	30%
Budget and financial management	31%	30%
How to comply with regulations	36%	27%

Male, 17-34, Suburban, Existing Claimant, said:

I’d say nine times out of ten it’s clear what to include. Sometimes there are things that I’m uncertain whether I can include, so I don’t put them in. I forget to ask about that, whether it’s going to be a claimable expense.

Base: All existing claimants before 16 March 2020 who are currently doing self-employed work (W1:1,307; W2: 1,327) and all new 2020 claimants initiating their claim between 16 March-22 June 2020 who are currently doing self-employed work (W1:1,143; W2: 1,274) excluding those who haven’t started SE work.

Top support needs by cluster for existing 2020 claimants

Please note: these are the same cluster assignments as used in Wave 1

Among the existing claimants that are passionate, knowledgeable and successful:

• 35% would like support with getting business loans or investment.
• 28% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 26% would like support with knowing how to move or promote their business online.

Among the existing claimants that are passionate, knowledgeable and struggling:

• 41% would like support with getting business loans or investment.
• 38% would like support with knowing how to move or promote their business online.
• 32% would like support with doing tax returns and reporting expenses to DWP or HMRC.

Among the existing claimants that are passionate and struggling:

• 56% would like support with knowing how to move or promote their business online.
• 55% would like support with getting business loans or investment.
• 53% would like support with doing tax returns and reporting expenses to DWP or HMRC.

Among the existing claimants that are content with other priorities:

• 35% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 28% would like support with how to move or promote their business online.
• 24% would like support with getting business loans or investment.

Among the existing claimants that are discontented:

• 41% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 36% would like help finding relevant training courses.
• 34% would like help changing the scope of their business.

Top support needs by cluster for new 2020 claimants

Please note: these are the same cluster assignments as used in Wave 1

Among the new claimants that are passionate and successful:

• 28% would like support with budgeting and financial management.
• 28% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 27% would like support with getting business loans or investment.
• 27% would like support with knowing how to move or promote their business online.

Among the new claimants that are passionate and struggling:

• 41% would like support with getting business loans or investment.
• 41% would like support with knowing how to move or promote their business online.
• 38% would like support with doing tax returns and reporting expenses to DWP or HMRC.

Among the new claimants that reported being content with other priorities:

• 32% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 31% would like support with knowing how to move or promote their business online.
• 31% would like support with budgeting and financial management.

Among the new claimants that are dispassionate with other priorities:

• 33% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 30% would like support finding relevant training courses.
• 23% would like support with knowing how to move or promote their business online.

Among the new claimants that are dispassionate and stuck:

• 47% would like support with doing tax returns and reporting expenses to DWP or HMRC.
• 47% would like support finding relevant training courses.
• 43% would like support with budgeting and financial management.

8. Conclusions

Conclusions

There is evidence of improved financial situations and improved profits – however, these have not yet returned to pre-pandemic levels.

Almost half of the 2020 new claimants are no longer claiming UC due to improved earnings. They are also reporting higher levels of control in hours worked.

Clearer communication on process and terminology is needed, particularly around the Gateway Interview and MIF. Even more knowledgeable claimants are not always fully aware of the terms and/or process. Claimants are optimistic about the future. Although there is a degree of uncertainty due to pressures from cost-of-living crisis as businesses continue to rebuild.

Appendix

Demographic Profile – Existing 2020 claimants

Gender

Gender	Percentage
Male	64%
Female	36%

Age

Age	Percentage
17 to 24	3%
25 to 34	28%
35 to 44	37%
45 to 54	22%
55+	9%

Carers

Care amount	Percentage
A great deal	15%
A fair amount	29%
A little	34%
Not at all	19%

Ex-armed forces

Yes or no	Percentage
No	96%
Yes	4%

Carer leavers

Yes or no	Percentage
No	97%
Yes	3%

Refugee status

Yes or no	Percentage
No	94%
Yes	4%

Prison leavers

Yes or no	Percentage
No	97%
Yes	2%

Base: All existing claimants before 16 March 2020 (W2: 1,411).

Demographic Profile – All new claimants (since 16 March 2020)

Gender

Gender	Percentage
Male	67%
Female	33%

Age

Age	Percentage
17 to 24	7%
25 to 34	29%
35 to 44	28%
45 to 54	22%
55+	14%

Carers

Care amount	Percentage
A great deal	13%
A fair amount	20%
A little	39%
Not at all	26%

Ex-armed forces

Yes or no	Percentage
No	96%
Yes	4%

Carer leavers

Yes or no	Percentage
No	97%
Yes	3%

Refugee status

Yes or no	Percentage
No	96%
Yes	2%

Prison leavers

Yes or no	Percentage
No	96%
Yes	2%

Base: All new claimants since 16 March 2020 (W2: 3,284).

Length of time in self-employed work

How long have you been self-employed in your current line of work? / Thinking about when you were last self-employed, how long had you been in your line of work?

Recontact ‘existing 2020’

Length of time	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
Under 12 months	25%	5%
12 months to less than 2 years	30%	27%
2 years to less than 3 years	11%	24%
3 years to less than 5 years	9%	15%
5 years or more	24%	27%

Recontact ‘new 2020’

Length of time	Wave 1 (Sep to Nov 2020)	Wave 2 (Sep to Nov 2021)
Under 12 months	10%	4%
12 months to less than 2 years	14%	11%
2 years to less than 3 years	10%	14%
3 years to less than 5 years	16%	19%
5 years or more	50%	51%

Amongst the recontacted existing 2020 claimants in Wave 2, there was a statistically significant difference from Wave 1 to Wave 2 in:

• Those that had been in self-employment for under a year decreased from 25% down to 5%.
• Those that had been self-employed for 2-3 years increased from 11% to 24%.
• Those that had been self-employed for 3-5 years increased from 9% to 15%.

Amongst the recontacted new 2020 claimants in Wave 2, there was a statistically significant difference from Wave 1 to Wave 2 in:

• Those that had been in self-employment for under a year decreased from 10% to 4%.
• Those that had been self-employed for 1-2 years decreased from 14% to 11%.
• Those that had been self-employed for 2-3 years increased from 10% to 14%.
• Those that had been self-employed for 3-5 years increased from 16% to 19%.

Base: All existing claimants before 16 March 2020 (W1/W2: 1,411) and new claimants between 16 March and 22 June 2020 (W1/W2: 1,331).

The top reasons for leaving self-employment were personal circumstances and the pandemic.

Since the first survey last year, you mentioned that you are no longer doing any self-employed work. What are your reasons for not doing any self-employed work at the moment?

Reasons for not being self-employed	Recontact ‘existing 2020’	Recontact ‘nes 2020’
Personal circumstances	67%	42%
Coronavirus/lockdown	50%	69%
Other reasons	41%	37%
Income or affordability	27%	25%
Market conditions	23%	24%

Base: All existing claimants before 16 March 2020 (W2: 84) and new claimants between 16 March and 22 June 2020 (W2: 57) no longer self-employed at Wave 2.

Similarly, most new 2020 claimants also plan to stay self-employed in 6 months’ time. Again, income and affordability is the top reason for those aiming to leave SE.

Reasons for staying self-employed in 6 months time Plan	Percentage
Plan to still be doing the same self-employed work	88%
Plan to be self-employed but in a different line of work	4%
Plan to work for an employer (3% at wave 1)	5%

Top 2 net reasons for leaving self-employed within the next 6 months	Percentage
Income or affordability	49% (59% at wave 1)
Personal circumstances	28% (9% at wave 1)

In 6 months’ time:

• 88% of new claimants plan to be doing the same self-employed work.
• 4% of new claimants plan to be self-employed but in a different line of work.
• 5% plan to work for an employer. This is a significant increase from 3% in Wave 1.

When asked, ‘What are your reasons for aiming to leave self-employment within the next 6 months?’ the top net reason was income or affordability reasons (49%). This was 59% at Wave 1. The second most common reason was personal circumstances, significantly increasing from 9% in Wave 1 to 28% in Wave 2.

Net values are percentage values for each response summed to broader categories.

Base: All new claimants between 16 March and 22 June 2020 (W2: 1,331); All new claimants between 16 March and 22 June 2020 who expect to be working for an employer as their main activity in 6 months, or not in paid work, nor retired in 6 months (W2: 70)

Appendix: Snapshot of all new UC claimants (started claim since 16 March 2020)

The majority of all new claimants are doing self-employed work only, across a range of sectors.

Which, if any, of the following are you currently doing to earn money? What is your main self-employed work?

Type of work	Percentage
Self-employed	94%
Working for an employer	11%
Doing both self-employed work and working for an employer	10%
Not in any paid employment	4%

Type of self-employment	Percentage
Domestic/utilities/vehicles	18%
Professional services	12%
Transport/distribution/delivery	12%
Manufacturing/construction/engineering	12%
Media/telecoms/arts	12%
Personal services/beauty/sport and fitness	7%
Social/healthcare/education/childcare	7%
Food/drink/hospitality/leisure	3%
Retail/sales	2%
Animals/agriculture	0%

Base: All new claimants since 16 March 2020 (3,284).

The majority of all new claimants are business owners or freelancers, and have been SE for 5+ years.

Which of the following describe any self-employed work you do? How long have you been self-employed in your current line of work?

Type of self-empoyment	Percentage
Business owner/director	41%
Freelancer	37%
Sub-contractor with a fixed schedule	20%
Work shifts of varying lngths and timeslots for another business	10%
Other	8%

Length of time	Percentage
Under 12 months	10%
12 months to less than 2 years	13%
2 years to less than 3 years	12%
3 years to less than 5 years	17%
5 years or more	46%

Base: All new claimants since 16 March 2020 (3,284).

The majority of new claimants are keeping up with their bills and credit commitments.

Thinking about the last two months, which one of the following statements best describes how well you have been keeping up with your bills and credit commitments? (Timescale: approx. July-Sept 2021/2022)

Status with bills and credit	Percentage
No difficulty	26%
Struggle from time-to-time	36%
Constant struggle	19%
Falling behind – some bills	7%
Falling behind – many bills	8%
No bills or commitments	1%

Those who are keeping up, but with constant struggle, are more likely to be those who have been self-employed less than 12 months (26%) and older claimants (55+) (24%).

Those who are mainly falling behind on bills are likely to be sub-contractors (11%) and those looking to change their SE work (16%).

Base: All new claimants since 16 March 2020 (3,284).

The main reasons new claimants choose their self-employed work is flexibility.

What motivated you to take up this self-employed work, rather than doing a different self-employed activity or working for an employer /increasing your employed work?

Motivation for self-employment	Percentage
Flexibility	45%
To do with the line of work	31%
Financial or econonomic reasons	28%
Personal circumstances	23%
COVID-19/coronavirus or lockdown	11%
Another reason	41%

Amongst the 41% that cited another reason for taking up their type of self-employment:

• 15% wanted to start their own business
• 7% wanted to try something new
• 14% saw SE as a personal hobby
• 5% had trained/qualified for their type of work

Percentages on the graph are top net values. Net values are percentage values for each response summed to broader categories.

Base: All new claimants since 16 March 2020 (3,277) excluding not started SE work.

Over three quarters of all new claimants feel they have control with the way they work.

Currently, how much control do you have over the following in your self-employed work?

Level of control	Number of hours each week	When you work (eg the times of day or days of week)	The way you work (eg how you can complete tasks or the order you complete them in)
A great deal	37%	39%	47%
A fair amount	29%	29%	29%
A little	21%	18%	14%
None at all	9%	10%	6%
Don’t know	3%	3%	3%

• 66% of claimants said they had a great deal or fair amount of control over the number of hours they work each week
• 68% of claimants said they had a great deal or fair amount of control over when they undertake their work each week
• 76% of claimants said they have a great deal or fair amount of control over the way they work

Base: All new claimants since 16 March 2020 (3,277) excluding not started self-employment.

The pattern of hours worked amongst all new claimants is similar to pre-lockdown levels.

Just before the UK went into lockdown in March 2020, how many hours a week did you normally spend on your self-employed work? / Currently, how many hours a week do you normally spend on your self-employed work? (%)

Hours worked	Before lockdown	Wave 2 (Sep to Nov 2021)
0 to 10	7%	10%
11 to 20	9%	12%
21 to 30	13%	14%
31 to 40	24%	23%
41+	30%	26%
Varies too much	9%	14%

Base: All new claimants since 16 March 2020 (3,277) excluding not started SE work.

Profits for new claimants

Profit or loss made	Pre-tax profit in August 2021	Typical pre-tax profit before lockdown
Made a loss	9%	3%
£0	9%	4%
£1 to £249	7%	4%
£250 to £499	7%	7%
£500 to £749	7%	7%
£750 to £999	5%	9%
£1,000 to £1,249	4%	8%
£1,250 to £ £1,499	5%	8%
£1,500 to £1,749	3%	6%
£1,750 to £1,999	2%	5%
£2,000+	14%	21%
Don’t know	24%	15%

Base: All new claimants since 16 March 2020 (3,277) excluding not started SE work. ‘Prefer not to say’ and ‘not self-employed before March / in August’ codes not shown.

Almost half of new claimants expect their self-employment activity to grow over the next 6 months.

Compared to your current situation, what do you expect to happen to your typical monthly profit from self-employment in 6 months from now – that is, around February 2022? Do you expect it to … ?

Expected outcome	Percentage
Grow	49%
Stay the same	23%
Decline	8%
Don’t know	20%

Base: All new claimants since 16 March 2020 who expect to be self-employed in 6 months’ time (3,030).

Most new claimants plan to stay self-employed in 6 months’ time. For those not planning to be in SE, half list income reasons.

New claimants reported that in 6 months’ time:

• 85% plan to still be doing the same self-employed work
• 6% plan to work for an employer
• 5% plan to be self-employed but in a different line of work

When asked ‘“What are your reasons for aiming to leave self-employment within the next 6 months?” the top 2 NET answer were income or affordability reasons (50%) and personal circumstances (28%). Net values are percentage values for each response summed to broader categories.

Base: All new claimants since 16 March 2020 (3,284);All new claimants expect to be working for an employer as their main activity in 6 months, or not in paid work, nor retired in 6 months (231).

New claimants are mainly passionate about their self-employed work, with over half disagreeing that they would rather work for an employer

Feelings towards self-employment	Strongly agree	Tend to agree	Neither agree nor disagree	Tend to disagree	Strongly disagree	Don’t know
Passionate about	62%	23%	9%	2%	2%	2%
Confident to make a success of self-employment	54%	32%	7%	3%	2%	2%
Have goals more important than my self-employment	19%	21%	25%	18%	13%	4%
Even if wanted to, unable to change current self-employment	19%	20%	17%	18%	21%	4%
If had chance, I’d work for an employer	11%	9%	16%	17%	43%	4%

Base: All new claimants who are currently doing self-employed work, excluding those not started self-employment (3,034).

New claimants are more likely to go to friends, family or self-employed peers for advice than to professional sources.

In the last 12 months, have you had any advice, guidance or support from any of the following to help you achieve your self-employment goals? Top mentions

Type of support or guidance	Percentage
Any peers who are self-employed or do same line of work	43%
Any friends or family members	40%
An accountant, bank manager or another finance professional	23%
Other government agencies	7%
Other private sector organisations	5%
Voluntary organisations (eg Citizens Advice)	3%
None of the above	30%
Don’t know	3%

Base: All new claimants since 16 March 2020 who are currently doing self-employed work, excluding those not started self-employment (3,034).

Competition from others, being unable to raise prices and lack of demand are top barriers for newer claimants.

To what extent, if at all, are each of the following stopping you from making the most of your self-employed work?

Problems being self-employed	Percentage
Competition from others	34%
Not being able to raise prices	31%
Lack of demand	30%
Difficulty getting business loans or investment	21%
Personal health issues	21%
Lack of support or mentoring	16%
Not having suitable premises or location	16%
Lack of digital skills	14%
Lack of business skills	13%
Other caring responsibilities	13%
Difficulty finding childcare	12%
Lack of local transport links	8%

Percentage a great deal / fair amount

Base: All new claimants since 16 March 2020 who are currently doing self-employed work, excluding not started self-employment (3,034).

Help regarding guidance on doing tax returns and reporting expenses would be helpful for new claimants.

In which of the following areas, if any, would you find it helpful to receive advice and guidance for your self-employed work? Top 6 mentions.

Type of helpful advice/guidance	Percentage
Doing tax returns and reporting expenses to DWP or HMRC	36%
How to move or promote your buiness online	32%
Budget and financial management	31%
Getting business loans or investment	30%
Finding relevant training courses	30%
How to comply with regulations	28%

Base: All new claimants since 16 March 2020 who are currently doing self-employed work, excluding those not started self-employment (3,034).

A third of new claimants now feel passionate and successful about their SE work. However, around a fifth feel dispassionate with other priorities.

Feelings about self-employment	percentage
Passionate and successful	30%
Passionate and struggling	18%
Content with other priorities	16%
Dispassionate with other priorities	18%
Dispassionate and stuck	13%

Base: All new claimants since 16 March 2020 who are currently doing self-employed work, excluding those not started self-employment (3,034).