Contractors’ earnings see a significant drop due to pandemic

The pandemic has resulted in contractors’ average quarterly earnings dropping to the lowest level on record.

This is according to the ‘How freelancers respond to an uncertain economy’ report released by the Association of Independent Professionals and the Self-Employed (IPSE).

The data shows that average quarterly earnings fell from £22,742 at the end of 2019 to £20,821 in Q1 of 2020 and £15,709 in Q2.

Although contractors’ average day rates remained somewhat stable, many have reported they are not working as much – for example, the average number of weeks they were not working per quarter rose from 3.3 to 5.5 out of 13.

Andy Chamberlain, IPSE Director of Policy, commented, “Overall, IPSE’s longitudinal report on our freelancer Confidence Index shows a sector that has been more attuned and exposed than others to political and economic fluctuations. Freelancers’ confidence in the economy has closely tracked political jolts like Brexit and government changes to self-employed IR35 tax legislation.

“Despite this, freelancers have generally remained more resilient and agile compared to other sectors – and their earnings and confidence in their businesses have generally remained much stronger than their confidence in the economy.

“However, these trends have been reversed by the extreme and extraordinary circumstances of the pandemic, leaving the freelance sector more financially fragile and in need of external support than at any other period on record.”

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