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Freelancers’ confidence in the economy and their future earnings is at an all-time low, according to a new report.
Freelancers’ confidence in their businesses and the wider economy has hit record lows due to the coronavirus crisis, according to new research.
A report by IPSE (the Association of Independent Professionals and the Self-Employed) and PeoplePerHour, finds freelancers’ three-month confidence in their businesses had already fallen to a six-year low last quarter because of concerns about the changes to IR35 tax regulations. This quarter their confidence in their businesses for the next three months fell even further from -14.7 last quarter to -62.6. IPSE says this is by far the lowest level it has reached. Their confidence in their businesses for the next 12 months has also fallen to the lowest level on record: from -23.2 to -57.3.
IPSE says: “These are both not only historic lows, but also the biggest one-off drops in confidence by some distance.”
The report shows confidence in the wider economy has dropped drastically too, having begun to recover last quarter from record lows driven by Brexit. Short-term confidence in the economy fell even more dramatically.
Added to the drop in confidence, freelancers have seen a fall in pay and the amount of work they are doing. Although freelancers’ average day rates remained relatively stable at £430 (down just £3 on last quarter), the fall in the amount of work drove their quarterly earnings down by 8.4 per cent. Freelancers are also extremely pessimistic about the coming year, with two thirds predicting a fall in their rates – with the average predicted drop at 20.1 per cent.
Inna Yordanova, Senior Researcher at IPSE, said: “At the moment, freelancers are experiencing a perfect storm of a drop in demand for their services, a creaking and straining economy and a lack of financial support from the government. Although the government has created the Self-Employment Income Support Scheme, which is generous for a proportion of the self-employed, many of the freelancers surveyed for the Confidence Index are limited companies who have so far had very little support.
“This quarter’s Confidence Index shows a sector that has been shaken to the core by the coronavirus crisis and is drastically pessimistic about the future. This should be an alarm bell for the government that this vital sector urgently needs more support.”