Who Benefits? The Difficulties for Women in Making the Transition from Unemployment to Self-employment

This document identifies key issues that discourage women depending on benefits in the UK from graduating to self-employment.

For a significant number of benefit-dependent women, self-employment is attractive as well as necessary. The rigid and complex benefit system is one of the major barriers to setting up a business. In addition, major programs such as New Deal and Work Based Learning for Adults are failing to attract women into self-employment. Key issues deterring benefit-dependent women from considering self-employment include:

• Low levels of initial earnings;
• Inability to cover child care costs;
• Need for flexible working hours;
• Tax credit calculations;
• Difficulties with delays in housing rent support;
• Inability of the benefit system to cope with fluctuating income levels;
• Losing mortgage support and losing secondary benefits.

The government needs to review these issues and increase support to those making the transition from benefits to self-employment. Agencies that provide support to low-income and unemployed women can also help address barriers caused by the current benefit system. Finally, mentoring can provide invaluable support to women transitioning from benefits to self-employment.