Contractor earnings at second lowest on record

The self-employed sector has been hit hard by the pandemic, with latest findings showing that average quarterly earnings are at the second lowest on record.

According to the recent Freelancer Confidence Index by PeoplePerHour and the Association of Independent Professionals and the Self-Employed (IPSE), earnings are down not because of significant decreases in day rates, but due to a rise in the number of weeks each quarter that contractors are not working.

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, commented on the findings, “2020 has been an incredibly difficult year for businesses of all shapes and sizes. Unfortunately, it seems to have been particularly tough for self-employed people including freelancers.

“As the second lockdown hits, we don’t expect to see these numbers rise in Q4, but we hope that Q1 in 2021 can provide a more positive outlook. The expectation is that freelancers with digital skills will once again fare better than those that are required to be on-site with clients.

“It’s clear that the government support has not done enough so far, and we urgently request the government to examine these figures and put together a new support package that better suits self-employed workers’ needs.”

Chloé Jepps, Head of Research at IPSE, added, “Freelancers’ quarterly earnings and working hours have levelled out at the second lowest on record and there are indications this could be a worrying new norm during the pandemic.

“This drop in earnings and work among highly skilled freelancers is indicative of similar problems right across the self-employed sector and, combined with the major gaps in support, this is leading to financial calamity for many.

“A large number of freelancers have had to close their businesses and, already this year, we have seen total self-employed numbers fall back to below 2015 levels, wiping out the growth of the last five years.

“The worrying financial news and decline in numbers in the self-employed sector should ring alarm bells for government. It must urgently step in with better-targeted support, so that flagging earnings and work hours do not have to lead to people closing their businesses and leaving self-employment for good.”

To find out more about contracting please contact Jaime on 01206 591 000 or email jaime.thorpe@contractorumbrella.com.