A new survey shows older workers who are self employed have lost more money than their younger counterparts during the pandemic.
Older self employed men have been the most affected by Covid pandemic loss of earnings, according to a new report.
The report by IPSE (the Association of Independent Professionals and the Self-Employed), based on a survey of over 1,000 freelancers, shows more than two out of five freelancers (42%) lost over 40 per cent of their turnover during the pandemic.
It found that two out of three freelance businesses (67%) were negatively affected by the pandemic, with 60% experiencing a drop in turnover. Almost one in ten freelancers (9%) saw a drop in turnover of over 90 per cent.
The financial damage of the pandemic varied significantly by gender, age and business structure, says IPSE. Three out of five sole traders (62%) saw a drop in turnover compared to 55 per cent of limited company directors. However, for those limited company directors who did see a drop in turnover, 56% saw a drop in turnover of over 40%, compared to 46% of sole traders.
Almost two-thirds (62%) of freelancers aged over 35 saw a decrease in turnover, compared to half of under-35-year-olds. Yet those aged 45 and above were more likely to imagine themselves being self-employed for the rest of their working (65%) compared to those aged under 45 (43%).
Over two out of five male freelancers (43%) also said their turnover decreased a lot compared to 36 per cent of female freelancers. Previous research shows men who are self employed earn significantly more than women so any drop in earnings is likely to be more noticeable. Women freelancers were also significantly more likely than men to have done training to expand existing skills (28% compared to 21%) or to learn new skills (26% compared to 18%) during the pandemic.
Although SEISS offered support to 3.4 million self-employed people, it excluded up to 1.6 million of the five million people who were freelance at the start of the pandemic. This has led to 52 per cent of freelancers saying they do not feel supported by the government. This rose to more than two out of three (67%) among limited company directors, who were excluded from SEISS.
The report also shows that one in four freelancers (25%) is considering leaving self-employment. Eight per cent said they were actively seeking alternatives to self-employment, while 17 per cent said they would consider leaving self-employment if a permanent opportunity came up. Of these, two out of five (43%) said this was because they felt they could earn more as an employee. Another two out of five (40%) said they wanted the security of employment, while over a third (35%) said they now wanted access to employment benefits like sick pay.
Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed), said: “Historically, not only did the freelance sector contribute over £300bn to the economy each year; it also played a crucial part in economic recovery during downturns. Freelancers offer the flexible expertise businesses across the country need to get themselves up and running again. The real question now is with the scale of the damage to freelancing – and the structural damage because of IR35 – will freelancers still be in a position to play that part? After so many were left out in the cold during the pandemic, and with so many threats to freelancing today, do people want to enter into self-employment?
“To make freelancing appealing and to get this vital sector back on its feet again, our message to government is this: repair your relationship with self-employment, clear up the mess after IR35, and build a stimulus package to support and kickstart the worst-hit parts of the sector.”