- Initial uncertainty over finding work during the pandemic led to half of freelancers being concerned about their financial security
- Nearly half (47%) of freelancers across the UK now seeing increased demand as a direct result of the pandemic and Great Resignation
- Concerns remain for most vulnerable freelancers hit with higher living costs and tax rates after having to take on COVID relief grants
London, 15 February – New research from Worksome, the tech platform connecting businesses with freelancers, and IPSE, the Association of Independent Professionals and the Self-Employed, has today found that almost half of freelancers (47%) have become concerned with their financial security following the pandemic.
The Great Resignation, caused by months of remote working during the pandemic led many workers to reassess their careers, job satisfaction and resign in a large number of cases, which has had an interesting double effect on the freelance community.
Nearly half (47%) of freelancers across the UK saw an increased demand as a direct result. In terms of job roles, nearly one in six (15.8%) freelancers said that the pandemic directly led to them becoming a freelancer. Of these, almost six in 10 (57%) of former full time workers are earning more than before and nearly three quarters (74%) are happier.
The report also found that while the majority (55%) of freelancers were saving for a future period of no work during the pandemic, nearly one in ten (9%) were not saving at all. These freelancers could be particularly hard hit by higher tax rates for freelancers that have also taken on COVID relief grants on top of rising inflation and living costs.
Despite the rollout of the government’s Self-Employment Income Support Scheme (SEISS), almost a quarter (24%) of freelancers had to use most or all of their savings for everyday expenses, with nearly 1 in 5 (18%) using a credit card or overdraft to support themselves during COVID.
While 57% were still able to put aside savings for later life and retirement, 13% said debt taken on during the pandemic prevented them from saving for later life as much as they would like and 7% said debt meant they hadn’t been able to save at all.
Morten Petersen, CEO and Co-Founder, Worksome said: “While the freelance market may be buoyant again, it’s clear that the darkest days of the pandemic and lockdown will have an impact on the freelance community for years to come. It’s crucial for government, business and civil society to come together to support this group of crucial workers who were not necessarily supported as well financially during the pandemic as others. Meanwhile, unfair tax rules on COVID relief grants continue to penalise this group of often highly skilled workers who contribute £162bn to the UK economy.”
Andy Chamberlain, Director of Policy at IPSE said: “Today’s research paints a mixed picture of the self-employment landscape. While we at IPSE welcome the increase in demand and the shift from some full-time employees to freelance work, it is clear that COVID-19 has been devastating for contractors. After 11 years of continuous growth, the number of self-employed workers has fallen from 5 million in 2019 to 4.1 million in 2021. Moreover, for thousands of those that have remained as freelancers, they have lost work, fallen into debt and been severely impacted by the reforms to IR35 in April 2021.
“As we (hopefully) start to recover from the pandemic, the government needs to clear up the confusion around IR35 and help self-employed workers that have fallen into debt during lockdown.”