Counting the cost of the pandemic on self-employment
One year on from the onset of the pandemic, this report examines its impact on freelancers’ businesses and income whilst also reviewing their plans for the future.
The impact of the pandemic
Our previous assessment of the pandemic, at its onset, revealed that freelancers were suffering from a loss in income, an increase in stress levels and greater cashflow problems – ultimately leading to 19 per cent of businesses expecting to cease trading as a result of the pandemic.
IPSE’s Freelancer Confidence Index, a quarterly economic report of the sector, revealed business and economic confidence fell to record lows as a result of the pandemic with quarterly earnings falling sharply and spare capacity increasing. In fact, freelancers’ quarterly earnings dropped from £20,821 in Q1 2020 to £15,709 in Q2 2020 representing the lowest level on record.9 In addition, in Q2 2020 freelancers were only working on average 7.5 weeks out of a possible 13 – the lowest level on record - with demand for work remaining below pre-pandemic levels throughout 2020.
Research also suggests that freelancers have been more heavily impacted than their employed counterparts by the pandemic. In fact, at the height of the pandemic, 60 per cent of freelancers saw their income fall during April 2020 – compared with just 22 per cent of employees – with almost a quarter reporting having to use their savings to cover living costs.
Our most recent work now shows that the majority of freelancers (67%) report that the pandemic has had a negative impact on their freelance business with just one in ten (10%) reporting that the pandemic had had a positive impact and 22 per cent reporting no difference.
Appendix
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