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8 December, 2020 Open access

Almost four in ten self-employed people expect it to take more than a year for their business income to return to pre-COVID-19 level

In light of survey findings, Money Advice Trust calls on government to introduce 'Self-Employment Recovery Strategy', to include grant scheme for those excluded from SEISS and reform of universal credit minimum income floor

Almost four in ten self-employed people expect it to take more than a year for their business income to return to its pre-coronavirus (COVID-19) level, according to a new report from the Money Advice Trust (MAT).

In Back to business: Supporting people in self-employment to bounce back from COVID-19, published today, the MAT sets out the findings of a survey of more 2,500 self-employed people including that -

Turning to how self-employed people view the future, the MAT says that nearly four in ten (37 per cent) of those surveyed expect it to be more than a year before their business income returns to its pre-COVID level, while 9 per cent think that it will never return to that level. In addition, four in ten (38 per cent) of the people surveyed said they had experienced an increase in late payments since the start of the outbreak, with almost three quarters (72 per cent) saying that late payments were making their financial problems worse.

As a result, the MAT says that it has written to Minister for Small Business Paul Scully calling for the establishment of a dedicated ‘COVID-19 Self-employment Recovery Strategy’, to include the following measures -

Commenting on the report, chief executive of the MAT Joanna Elson said -

'COVID-19 has dealt a huge and sometimes devastating blow to the finances of self-employed people across the country. Government support has helped in the short-term, but any hope of a financial recovery remains a long way off for many - and the millions excluded from support are facing severe challenges.

The impact of this crisis goes far beyond the business, with personal and family finances taking the brunt. Most worryingly, all of these challenges are coming at a severe cost to the mental health of self-employed people.

The government must urgently set out a COVID-19 Self-employment Recovery Strategy to provide a route out of this situation. This needs to include a dedicated grant fund for those so far excluded from support, improvements to the support available through universal credit and stronger action on late payments.'

For more information, see 4 in 10 self-employed expect COVID income shock to last more than a year from moneyadvicetrust.org