UK Unemployment 2025: How People and Businesses Are Fighting Back

Part 2 of our 2-part series on UK unemployment in 2025 — exploring not just the struggles, but the signs of resilience, reinvention, and community strength.

If there’s a silver lining to the current wave of redundancies, it’s this: Britons are turning adversity into action. As unemployment creeps up in 2025, many individuals are responding with resilience – launching startups, going freelance, and finding new ways to work – while small businesses and community groups rally to support them. This grassroots response is injecting hope into an otherwise worrying job market. From young entrepreneurs to local charities, stories are emerging of people making a fresh start after layoffs and communities pulling together to create opportunities. In this article, we explore these responses and highlight how organisations like Ratcliffes Insurance are contributing to the fightback through support for SMEs and community leadership.

 

From Redundancy to Start-Up: Turning Setbacks into New Ventures

Paradoxically, a layoff can spark the entrepreneurial spirit. According to research by Startups.co.uk, nearly a quarter of startup founders say their venture was motivated by losing a previous job or facing unemployment. In fact, the first half of 2024 saw a record 468,000 new businesses created in the UK — a boom coinciding with a surge in redundancies (about 89,000 layoffs occurred in just the first quarter of 2024 (Startups.co.uk).  While we have not been able to find the latest data, it highlights the recent trend.

Real-life success stories underpin this trend. For example, Elizabeth Willetts, a former recruiter, founded the inclusive job board and community platform 'Investing in Women' after being made redundant during maternity leave. Her story, featured on the Another Door podcast, highlights how personal experience and a clear mission can drive impactful business ideas (anotherdoork.co.uk).

Financial institutions and government programs are supporting this startup surge. Initiatives like the NatWest Accelerator report that participants significantly outperform their peers in growth and survival (Punchline Gloucester). Policymakers have lauded 2024’s record business creation as a sign of economic potential, with ongoing pledges to make the UK “the best place to start up a business.”

 

The Freelance Shift: Temp Work and Side Hustles on the Rise

Not everyone responds to a job loss by starting a company – many are turning to freelance and temporary work as a practical alternative. A recent survey reported by Startups.co.uk found that 57% of laid-off white-collar workers planned to pursue alternatives to full-time employment. Over a third intended to start their own one-person business or formalise their freelance status.

Several factors drive this shift: weakened trust in corporate job security, rising cost of living, and the accessibility of gig platforms like Fiverr and Upwork. About 35% of workers also said they planned to keep a secondary income source even after returning to full-time work.

While gig work offers flexibility, it has also raised concerns about fairness and security. Gig workers often face unpredictable hours, lack of sick pay, and minimal employment protections. Although there have been calls for reform – such as clearer employment definitions and stronger rights for those in precarious work – progress has been limited. This has led to ongoing debate around how best to ensure these workers are supported and protected in an increasingly freelance-driven economy.

 

Youth Resilience and Community Support

Young people are also rising to the challenge. Many are pursuing further education, apprenticeships, volunteering, or forming startups with peers.

The Forward Trust provides employment support for those facing barriers to work, including mentoring and training schemes like the Restart programme backed by the Department for Work and Pensions (The Forward Trust). Meanwhile, WorkingRite in Scotland pairs school-leavers with mentors and on-the-job placements, helping young people transition into meaningful work (Workingrite).

In Cheltenham, CHLTM.TECH recently ran an Advanced Cyber & AI Bootcamp aimed at young adults aged 18 and over. The programme supported participants in turning tech ideas into viable businesses, providing mentorship and hands-on experience tackling real-world challenges in AI and cybersecurity (CHLM.TECH).

Across the UK, informal job clubs, community-led business support, and skills events are helping people stay connected and gain access to new opportunities.

 

Leading by Example: Ratcliffes and Local Business Leadership

Ratcliffes Insurance Brokers and its founder continue to play an active role in supporting the community and local businesses. The firm’s long-standing involvement with CCP (Caring for Communities and People), the ITSA Digital Trust and the Cheltenham Chamber of Commerce highlights our commitment to enterprise, opportunity, and social impact across Gloucestershire and nationwide.

Through tailored insurance services, Ratcliffes helps SMEs stay resilient — offering guidance on Commercial Vehicle protection, Goods in Transit insurance, Employers’ and Public Liability cover, cyber liability insurance and more. The team works closely with SMEs to help them understand and manage risk — including support through local networks and insurance advice tailored to their needs.

 

What This Means for Us

At Ratcliffes, we have always believed in the power of people to adapt and rebuild. We see this not just in the insurance work we do — helping clients protect new ventures, vehicles, and livelihoods — but also in our own ties to the community.

This moment is hard, but it’s not without hope. If Part 1 looked at what’s broken, Part 2 was about what’s being rebuilt — not just by governments or policies, but by ordinary people doing extraordinary things.

 

 

Need support for your small business or new venture? We are here to help you stay protected as you grow. Contact us to find out more.

Missed Part 1? Catch up here