Why female founders will be £34k worse off after the Spring Statement
Find out why female founders will be disproportionately impacted – to the tune of £34k – by the Spring Statement, and what you can do.
With UK businesses paying more National Insurance for each employee they hire from 1 April, growing a team becomes less viable without significant funding.
Financial backing is statistically much easier to get if you’re a man. Only 2% of VC funding goes to all-female founding teams. Women face discrimination and are offered smaller business loans. Consequently, more than three-quarters of women entrepreneurs end up self-funding their business.
Since staff costs represent a huge proportion of business outgoings, the increase in NICs, on top of the National Living Wage, will hit these female-led businesses particularly hard.
For example, since male founders receive 44% more funding on average than women, a female-led company might only secure £50,000 funding where a majority-male startup would get £90,000. If both businesses had 10 employees on a £25,000 salary, they each face an £8,000 increase in staff costs when the rate and NICs threshold change.
With more capital, the company led by men will absorb the NICs increase and continue hiring. However, female leaders may be forced to limit headcount and sacrifice £34,000 over the next three years from their Research and Development budget to cover higher staff costs.
These growth constraints placed on female-led businesses could create a cumulative advantage for men, slowing progress towards gender equality.
What support do women entrepreneurs need now?
As Britain’s first female chancellor, Rachel Reeves must prioritise the untapped potential of female founders. Hardworking small business owners deserve support as well as high-growth potential startups.
Alongside the £250 million government-backed ‘women backing women’ fund announced in 2024, targeted financial support is needed for small, female-led businesses on our high streets. This could save jobs, grow the economy and make Britain a country where more women want to be their own boss.
Four tips for female founders
Amy Knight, NerdWallet UK’s small business expert and spokesperson shares four tips for female founders in light of the changes.
1) Build your network
Building a business can feel isolating, especially if you identify with an underrepresented group, so finding your community can make all the difference.
Networking can be daunting for women, especially in male-dominated spaces, so consider joining online communities as well as in-person events. Examples of supportive networks for women entrepreneurs include Antler, Female Founders Rise, and Zinc VC.
2) Seek mentorship
A business mentor can open doors as well as provide capital. Don’t be shy about approaching a female founder you admire to ask advice, and be willing to learn from younger people as well as those with decades of experience. From increased engagement on social media to future-proofing your brand, insights from Gen Z could strengthen your business.
3) Look for angel investors
Angel investors don’t just provide a source of much-needed cash, they want to give something back. They do this by sharing their expertise and knowledge, helping you avoid the mistakes they made themselves.
4) Hone your finance skills
When seeking external investment, it’s vital you know your numbers inside and out and understand how funding works. But, don’t let the fear factor stop you from exploring this route to business growth. Look for free courses delivered online and in person by local enterprise support agencies, or contact the Chambers of Commerce about training programmes.
Amy Knight is NerdWallet UK’s small business expert and spokesperson. Her comments and tips have appeared in national publications including the Financial Times Adviser, The Independent, Bloomberg, Director of Finance, Marie Claire magazine and more.
You can also hear Amy on live radio, such as The Times Radio Breakfast Show and BBC 5 Live’s Late Show, covering everything from pensions, childcare costs and meal deals to the latest economic headlines.
