New research from Worksome, the technology platform connecting companies with freelancers, and IPSE, the Association of Freelance Professionals and Freelancers, today found that almost half of freelancers (47%) worried about their financial security following the pandemic.
The Great Quit, caused by months of working remotely during the pandemic, has led many workers to re-evaluate their careers, job satisfaction, and quit in a large number of cases, which has had an interesting dual effect on freelance community.
Almost half (47%) of freelancers in the UK have seen an increase in demand as a direct result. In terms of positions, nearly one in six freelancers (15.8%) said the pandemic had directly led them to become a freelancer. Of these, nearly six in 10 former full-time workers (57%) 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 out of work during the pandemic, almost one in ten (9%) were not saving at all. These freelancers could be particularly affected by higher tax rates for freelancers who have also accepted COVID relief grants in addition to rising inflation and the cost of living.
Despite the rollout of the government’s Self-Employment Income Support Scheme (SEISS), almost a quarter (24%) of the self-employed have had to use most or all of their savings for day-to-day expenses, with nearly one in five (18%) using a credit card or overdraft to support themselves during COVID.
While 57% were still able to set aside savings for later in life and for retirement, 13% said debt incurred during the pandemic had prevented them from saving for later in life as much as would like to and 7% said debt meant they hadn’t been able to save at all.
Andy Chamberlain, policy director at IPSE, said: “Today’s research paints a mixed picture of the self-employment landscape. While at IPSE we welcome the increase in demand and the shift of some full-time employees to self-employment, it is clear that COVID-19 has been devastating for entrepreneurs. After 11 years of continuous growth, the number of self-employed has increased from 5 million in 2019 to 4.1 million in 2021. Additionally, for thousands of those who remained self-employed, they lost their jobs, got into debt and were severely affected. impacted by the IR35 reforms in April 2021.
“As we (hopefully) begin to recover from the pandemic, the government needs to clear up the confusion around IR35 and help the self-employed who got into debt during the lockdown.”
Morten Petersen, CEO and co-founder of Worksome, added: “While the freelance market is vibrant again, it is clear that the darker days of the pandemic and lockdown will impact the freelance community for coming years. It is crucial that government, business and civil society come together to support this group of essential workers who have not necessarily been as financially supported during the pandemic as others. Meanwhile, unfair tax rules on COVID relief grants continue to penalize this group of often highly skilled workers who contribute £162billion to the UK economy.