Freelance earnings and confidence make 'remarkable recovery'

Freelance earnings and confidence make ‘remarkable recovery’

Freelance earnings and confidence in economy bounce back to pre-pandemic levels

Research by self-employment trade body, IPSE, in conjunction with freelance job platform, PeoplePerHour, has found in the first quarter of 2021, freelance earnings made a “remarkable recovery”. The study shows average quarterly earnings in Q1 were 20 per cent higher than at the end of 2020 (£20,778 compared to £17,283).

The study attributes this significant rise down to an increase in day rates and the amount of work freelancers carried out in this period. 

It also found that the average spare capacity – the number of weeks freelancers can go each quarter without work – dropped from 4.3 weeks to 3.7 weeks in Q1. While this is still not back to pre-pandemic levels (3.3 weeks in Q1 2020), freelancers have mitigated this by raising their day rates – £445 on average, the highest since Q3 2019.

Confidence growing but room for improvement 

According to the research, freelancers’ confidence in the UK economy has also risen for both the short and long-term. Confidence in the short-term (3 months) increased from -27.8 to -4.3, which is the highest since Q4 2015 – just before the Brexit referendum.

Confidence in the long-term (12 months) economy jumped from -27.7 to -0.2 – again the highest since Q4 2015.

Although confidence in the economy has surged, freelancers’ confidence in their own business performance has not. In fact, business confidence in the short-term dropped from -11.9 to -13.9, while in the long-run, it remained stable at -15.6.

This is the first time since 2014 that freelancers have had less confidence in their business than the economy.

Roadmap to reopening drives ‘remarkable recovery’ in freelance confidence 

The report states that lacking business confidence is being driven by recently introduced IR35 reform and the impact the changes are having on the demand for freelancers and contractors. 

Andy Chamberlain, Director of Policy at IPSE commented: “The roadmap to opening up the UK has driven a remarkable recovery in freelancers’ earnings and also their confidence in the economy. 

“[…] After a dark year in which they were disproportionately hit by the financial impact of the pandemic, freelancers are again seeing cause to hope. Amid the optimism, however, there are also lingering causes for concern. 

“Historically, the freelance sector has always been a key driver of economic recovery and it is clearly raring to go. At the same time, however, the IR35 tax change is a blight on freelancers that is undermining them at a crucial and otherwise optimistic time. 

Confidence ‘testament to the resilience’ of freelancers

“We urge the government to step in, clear up the chaos left after IR35 and launch a full review and reform of self-employed taxation. It must ensure freelancers have the confidence in their way of working to take up their vital place in our workforce and drive the UK’s economic recovery.”

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour added: “It’s incredibly encouraging to see that freelancers’ confidence in the economy is the highest it’s been for six years. This is a testament to the resilience of the freelance economy, and we hope to see this trend progress as the road out of lockdown continues.

“Whilst it has been an incredibly tough year for all workers, more people have turned to freelancing as a way of maintaining or increasing their income. The freelance economy is more important than ever to the UK’s overall economy, so it’s crucial that the government supports this growth.”


  • Gary Andrews says:

    The term “remarkable recovery” would imply freelance working has recovered to its previous state and all is well.

    Is there a term for “total lockdown, deprived of support, drowning in debt, with career ending legislation looming”. That would be a more apt description for Q1 (2021), to spin it as being better than the horrific Q4 (2020) says a lot about where we are and ranks alongside “be thankful you didn’t die”.

    It would be good for IPSE to show us a graph of small business closures over that same time frame rather than the nebulous “business confidence”.

    • Jamie M says:

      The contractor market won’t return until the law changes, until then we’ll be living on scraps while the big outsourcers take all the lucrative contracts we are now banned from. The law won’t change while this government is in power, time to send a message at tomorrows elections.

  • XY says:

    As a representative body, IPSE are about as useless as it gets.

    The survey suggests that earnings went up due to working more at higher rates. The alternative being…? Interference by aliens?

    And suggesting that “contractors raised rates”… do they know how the market works?

    There’s just a bit more work about now due to the nebulous “business confidence”.

    So they want another “review” eh? Will it be like the last one, where contractors are “represented” by “experts” who all have a vested interest in IR35? Last time they were contract reviewers, IR35 insurance providers and… IPSE.

    None of these made many of the obvious points, all of them have an interest in IR35 continuing (IPSE because most of their members joined thinking that they were supporting a fight against IR35) and would likely not renew if they think it’s over). Another review keeps them a while longer.

    What was the drum they were banging last time? That contractors supposedly wanted “certainty”… and they got it: “you’re all caught”. No-one asked for certainty, contractors wanted rid of IR35, contractors did not expect or want to be paying both forms of NI and all the tax bands that everyone else pays and the dividend tax.

    That’s what’s wanted. Now, who can be trusted to ask for that and to *genuinely* make the case for it?

  • Tony says:

    Certainly not my experience, where I’m seeing rates on offer slashed by 40-50% as quite normal. Whether these posts are being filled or not is another matter, but judging by the criteria and experience required for these roles, I’d be surprised if contractors took on such work unless absolutely desperate.

    • Matt says:

      Yes, I don’t know where IPSE are getting these massaged figures from either. Is it because most contractors have been binned and the few remaining (before IR35) were higher value thus bringing the average rate up?
      That’s how I would play it if I wanted to propagandise green shoots the day before an election. These people are meant to represent us.

  • Jamie M says:

    The Sunak family business exploiting the IR35 jobless and snapping up their vacant contracts. Shameful Tory corruption:

    Infosys announces plan to hire 1,000 workers in UK over next three years.

  • No point moaning says:

    We lost

    So they (HMRC) lose

    Zero earnings last year £20k of debt that needs to be earned and paid back by the company

    So zero tax last year and looking like zero tax for this year

    Well done HMRC and Mr Sunak, spiffing job on the economy, huzzah

  • The_Mystic says:

    Not escaped my attention that HMRC are still continuing their IR35 strategy of “Rifling thru the TV Times” and have focused on Gary Lineker.

    Doesn’t he market Walkers Crisps in addition to Match of the Day. Clearly Outside the Scope of IR35.

    HMRC do not seem to have learned any lessons from their humiliating defeat in HMRC vs Kaye Adams 2021.

    Just inserted 18 clauses in the current contract to remain Outside of IR35. 8 Clauses relate to the provision of a Substitute. Others relate to determining Unilateral Time Setting, Typical Work Location & Lack of Line Authority over Permanent Staff.

    None make a blind bit of difference to the the typical Contractor Protocols.

    IR35 is an irrelevance, a distraction aimed to encourage Offshoring & aim to drive Personal Service Companies into extinction.

    HMRC are seeking to inflict more damage to Contractors & Gary Lineker than Maradona’s Left Hand.

    • Gary Andrews says:

      HMRC might have bitten off more than they can chew with Gary Lineker.

      Lineker is an international footballing legend with a deserved reputation for honesty and fair play. This case has the potential to bring a spotlight onto HMRCs endless lying, bullying and persecution of small businesses. Here is a respected personality with resources and a platform able to defend himself, not just an insignificant small business owner with a large mortgage and a family to support.

      We all saw him take those penalties in the world cup, balls bigger than King Kong. Contrast that with the backroom weasels of the revenue using other people’s money to prosecute easy wins through lies, manipulation and the misinformed court of public opinion.

      Two questions need answering:
      1) Would Lineker have been prosecuted if he were a Brexiter?
      2) Is this a political show trial?

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