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Beyond the statistics - The impact of Covid-19 on self-employed people

Harriet Dines

Senior Policy and Communications Officer at Money Advice Trust

In this latest blog post on our Back to Business report, our senior policy and communications officer, Harriet Dines, looks at the personal experiences of self-employed people impacted by the outbreak of Covid-19.

From the outset it has been clear that the incomes of self-employed people and their businesses have been badly hit by Covid-19.  Our Back to business report shows just how significant this impact has been so far. One in three (29%) self-employed people we surveyed had fallen behind on at least one household bill or credit commitment and the average debt accrued stood at £3,444 per person.

But, while numbers can tell us part of the story, it is the personal experiences that really illustrate just how bad the situation has become for many. In this post we share, in the words of the self-employed people we surveyed, the ongoing challenges many face.

Incomes hit hard

Our research, from which the following quotes are drawn, was carried out in September last year before the introduction of further lockdown measures. It is likely that many who were facing difficulty then will be facing the same problems now – if not worse. 

“My income dropped by 97% for 4 months.  It’s only just crept back up to 60% of last year.”

“My business income dropped to zero at the end of March, and I am only now seeing a chance to earn much smaller income.  In the meantime I have racked up large credit card bills, and cashed in my only private pension.”

“I basically had to use my savings all through lockdown and had no income at all”

“We took a 15% drop in business income and working from home full time increases domestic utility bills.”

‘’It’s been disastrous for me personally and on a business level.  Before, you know, generally I’ve been able to bounce back.  This is a double whammy.  Covid-19 has totally decimated things.’’

Government support – one size doesn’t fit all

For many, the Government’s Self-Employment Income Support Scheme (SEISS) and government-backed loans, such as the popular Bounce Back Loan Scheme, have provided much needed financial relief.  A quarter (25%) of those we surveyed had received a grant through the SEISS and one in 10 had taken out some form of government-backed loan, the most popular being the Bounce Back Loan.  In cases where support was accessed, reactions were mainly positive.

“To be honest, the help from the Government has certainly been a good thing”

“The government has been supportive, especially on the .Gov website that provides a lot of information about the money available to self-employed people.”

“Myself, I feel very supported – as a self-employed person.”

However, many were not eligible for support under existing schemes, particularly the SEISS.  Much has been said about the exclusion of owner/directors from the grant, with the Institute for Fiscal Studies estimating that 2 million self-employed people have been unable to access it due to the eligibility criteria.  The impact of this on self-employed people and their businesses was clear to see.

“I was unable to get help because the income I receive from my company is through dividends. Even though my income was severely affected by the situation, I was not eligible to receive any help except through a loan which, in my opinion, would make recovery harder in the long term as I would need to repay that loan.”

“I didn’t qualify for any of the support offered to self-employed people because I hadn’t been in business long enough (was yet to submit my first tax return). I feel that this ultimately led to me needing to cease trading as I did not have the money to feel confident with re-launching the business once I was able to open again.”

“As directors of our own business we have definitely fallen through the cracks, and it’s heart-breaking.”

Universal Credit – A small help

Those without access to the SEISS and other schemes have had to rely on Universal Credit instead. But for many, the payments simply aren’t enough to cover their loss in income.

“I wasn’t eligible for anything apart from approximately £104 a month universal credit which hasn’t been enough. I’m going to probably have to close my business down due to lack of business coming in.”

“I was self-employed for only 10 months before the outbreak of Covid-19 and because I’m a freelance/mobile stylist I don’t have premises I wasn’t entitled to any help other than to claim Universal Credit as a single parent for help with rent and council tax.”

Of the people receiving Universal Credit we surveyed, almost half (47%) were behind on at least one household bill or credit commitment, compared to 21% amongst those not receiving it.  Clearly, for many, the payments aren’t stretching far enough to stop them falling into debt.

Support for the excluded

A month into the current lockdown, and almost a year on from the first, self-employed people excluded from the SEISS are likely to be facing further financial difficulty.  And for those falling behind on their bills and accessing loans or other forms of credit to cover the costs of the virus’s impact on their business, the debt is mounting up.

That is why we are calling for the Government to introduce an emergency discretionary grant scheme to support those excluded from the SEISS to help them weather the impact of the pandemic and give them and their business more chance of recovering in the long run.  Without this, as one respondent to our poll put it, self-employed people without access to support will be forced to continue “filling the holes in a sinking ship”.

In December we published our Back to business: Supporting people in self-employment to bounce back from Covid-19 report based on a UK wide poll of 2,500 self-employed people and their experiences of the impact of Covid-19 on their business.

Our first blog on this new research sets out key findings about the impact of Covid-19 on self-employed people, and the action needed from the Government to help them back to business. 


Harriet Dines

Senior Policy and Communications Officer at Money Advice Trust

Harriet is the Money Advice Trust's Senior Policy and Communications Officer. She joined the charity in January 2020, having previously worked as a Parliamentary Researcher and Communications OfficerView all posts from Harriet Dines.



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