30% of start-ups founded due to redundancy or long-term unemployment

7th June 2016 | News

Almost a third (30 per cent) of new business start-ups in the UK, founded in the last five years, were created in response to redundancy or long-term unemployment, according to a new report from AXA.

The research found that age, caring duties and disability are increasingly cited as reasons for becoming self-employed. Meanwhile almost a fifth (17 per cent) of new start-ups are founded by parents looking for a long-term solution to growing childcare costs.

A new entrepreneur demographic is beginning to play a more integral part in the UK economy with ‘grey entrepreneurs’ – those aged 55 to 65 – amounting to 25 per cent of all new businesses started in the last five years. In addition, seven per cent of start-ups were founded by those of state age pension.

Furthermore, the report found that the number of people who transform a hobby they are passionate about into a profitable business has doubled to 30 per cent in the last five years.

It took many entrepreneurs surveyed to undergo some form of life crisis in order to learn the business survival skills they needed to make their mark. Crises such as financial disaster (15 per cent), accident or illness (17 per cent), previous business failure (nine per cent), depression or breakdown (16 per cent) and heartbreak (11 per cent) were cited as being major influences in future business ventures.

Darrell Sansom, managing director, AXA Business Insurance, said: “Entrepreneurs are coming from a wider diversity of backgrounds than ever before.

“Mums-at-home, people approaching pensionable age, and those living with disabilities are all starting up in greater numbers.

“They’re giving our economy a huge shot in the arm, bringing fresh ideas, creativity and life experience to business. And with the majority telling us they are a success, even at an early-stage, we can certainly see the new style of doing business works.”