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New Enterprise Allowance helps launch 80,000 SMEs

More than 80,000 businesses have been set up by jobseekers through the New Enterprise Allowance, according to Government data.

Figures released by the Department for Work and Pensions (DWP) show 80,830 start-ups in trades such as electrical installation, graphic design and jewellery-making have been launched between April 2011 and December 2015 - an average of 1,420 a month.

Of the New Enterprise Allowance (NEA) businesses set up, approximately:

  • 30,300 (37%) were by women;
  • 19,000 (24%) were by people aged over 50;
  • 16,400 (20%) were by people with a disability.

Employment Minister Priti Patel said: 

"The New Enterprise Allowance is one of the great success stories of this Government's drive to get more people into work. By helping people off benefits and to become their own boss we're enabling them to make the most of the business opportunities out there at the moment."

Of all the NEA businesses, the top five start-up areas were: Liverpool, Sheffield, County Durham, Birmingham and Glasgow.

A Government survey of NEA participants published in January showed that 80% of the businesses started through the scheme were still trading at the time of the survey, with more than 90% of these still going a year after launch.

It also found that 96% of respondents reported that they were unemployed before joining NEA. NEA recipients surveyed came from a wide variety of educational backgrounds with 17% having secondary school level qualifications as their highest qualification, 23% with a vocational qualification and 21% with an undergraduate degree.

The survey also showed that 70% had no previous experience of self-employment. The key reasons for choosing self-employment were having a business idea (60%) and respondents wanting the freedom of being their own boss (52%).

Start-up support from the NEA is available to people aged 18 and over and claiming Jobseeker's Allowance (JSA), Employment and Support Allowance (ESA), Income Support claimants who are lone parents or who are sick, and some Universal Credit claimants.

After showing their business idea is viable, NEA participants are eligible for a weekly allowance over 26 weeks up to a total of £1,274 for claimants to establish their start-up.

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