Freelancers’ average quarterly earnings have dropped to the lowest level on record because of the coronavirus pandemic, new research by the Association of Independent Professionals and the Self-Employed (IPSE) shows.
IPSE’s report, How freelancers respond to an uncertain economy, found that the average quarterly earnings of highly skilled freelancers fell from £22,742 at the end of 2019 to £20,821 in Q1 of 2020 and £15,709 in Q2 – the lowest level on record.
The fall in earnings from Q1 to Q2 2020 was also the second-biggest drop since IPSE’s Confidence Index began in 2014 (following the fall in earnings immediately after the vote to leave the EU in 2016).
The drop in earnings in 2020 was because, although freelancers’ average day rates remained relatively stable, the average number of weeks they were not working per quarter rose from 3.3 to 5.5 out of 13.
IPSE’s longitudinal report on its Confidence Index also showed that freelancers’ short-term confidence in their businesses dropped to by far the lowest level on record because of the coronavirus pandemic: -62.6 (compared to -11.5 immediately before the vote to leave the European Union).
Andy Chamberlain, Director of Policy at IPSE said, “Overall, IPSE’s longitudinal report on our freelancer Confidence Index shows a sector that has been more attuned and exposed than others to political and economic fluctuations. Freelancers’ confidence in the economy has closely tracked political jolts like Brexit and government changes to self-employed IR35 tax legislation.
“Despite this, freelancers have generally remained more resilient and agile compared to other sectors – and their earnings and confidence in their businesses have generally remained much stronger than their confidence in the economy.
“However, these trends have been reversed by the extreme and extraordinary circumstances of the pandemic, leaving the freelance sector more financially fragile and in need of external support than at any other period on record.”