A lack of financial confidence is emerging as a structural barrier to entrepreneurship in the UK, preventing many small businesses from growing — or forming at all — according to a new taskforce convened by Xero.

The Financial Confidence Taskforce, made up of figures from business, accountancy and education, is calling on the UK government to take a more ambitious and joined-up approach to financial literacy. Without it, the group argues, entrepreneurship risks remaining inaccessible to large parts of the population, particularly younger people and those from less advantaged backgrounds.

Research commissioned by Xero suggests that weak financial confidence is widespread among small business owners. Nearly two in five respondents said they were unsure whether their business had been profitable in the previous month, while more than half reported difficulties managing cash flow. More than a quarter described themselves as “not a numbers person” — a mindset the taskforce says translates into slower growth, missed opportunities and reluctance to seek external funding.

The challenge appears more acute among younger entrepreneurs. More than a third of those aged 18 to 34 said they lacked the financial skills needed to manage a business, compared with significantly lower levels among older age groups. Many cited a “real-world shock” when enthusiasm for entrepreneurship collided with the administrative demands of running a company.

Kate Hayward, UK managing director at Xero, said the UK had failed to make entrepreneurship feel either achievable or attractive. “We’re a nation of small businesses, but not one that teaches people to be excited by entrepreneurship,” she said. “Fear of figures can quickly turn aspiration into something that feels out of reach.”

The taskforce is proposing a broader rethink of how financial confidence is built, arguing that classroom teaching alone is insufficient. Its framework focuses on three aims: making enterprise aspirational, improving practical understanding of business finances, and creating more opportunities for hands-on experience.

That includes closer involvement of employers, wider use of accountants as business partners, and real-world exposure to running enterprises while still in education. The group is also calling for a single minister with responsibility for financial literacy and for further simplification of the UK tax system.

Grace Hardy, a chartered accountant and taskforce member, said visible role models were essential. “Financial confidence is a skill anyone can unlock — not a barrier to entry,” she said.

The taskforce includes representatives from organisations such as the Centre for Entrepreneurs and Young Enterprise. Its recommendations sit alongside existing initiatives supported by Xero, including programmes delivered with Small Business Britain and The King's Trust, aimed at reducing the practical and psychological barriers to starting a business.