Sole traders: the worst affected of all businesses by the pandemic

Nearly half of sole traders are now trading less than pre-COVID times

The number of sole trader businesses in the UK has grown by 28% in the last decade; they now account for 59% of the UK business population. Yet they’ve been disproportionately impacted by the impact of COVID: nearly half are trading less (or not trading at all) compared to pre-COVID times. This is compared to 33% of (limited) companies.

Where December 2020 saw a strict three tier system of restrictions, forcing many businesses to stop operations – only 14% of sole traders saw higher Christmas demand during the same period in 2021, when there were no restrictions in force (vs 22% of limited companies).

Sole traders’ sacrifices in 2021

The impact of the pandemic resulted in sole traders giving up their time, holidays and money in 2021:

• Over a quarter (28%) of sole traders worked extra hours
• Nearly a third (30%) used their own personal money to finance their business
• Nearly a quarter (23%) didn’t take any time off
• 1 in 5 gave up their salary

As we enter 2022, over a third (34%) of sole traders think they’ll be worse off by the end of the year than they were at the end of 2021. This is compared to 22% of limited companies.

And our previous reseach on the impact of COVID on sole traders revealed nearly 1 in 4 planned to take zero days off in 2022.  

Our data illustrates how important it is that there’s tailored support available for sole traders this year.

{{finance-explained-cta="/components"}}