The lack of the kind of employment protection afforded to salaried workers makes the lot of freelance workers somewhat more perilous than their peers, and new research from the Association of Independent Professionals and the Self-Employed highlights this all too clearly.

The analysis shows that the average income of freelancers fell by 25% during the second quarter of 2020 as the financial impact of Covid hit home.  This fall was primarily caused by a record fall in the number of hours worked during the quarter, with the data suggesting the average freelancer was without work for over 5 of the 13 weeks during the quarter.  This coincided with a 3% fall in average day rate during the same period.

Unequal impact

As you might expect, this impact was not felt equally across the sector, with self-employed managers seeing a fall of around 35%, versus a fall of just 16% for more technical freelancers.

Perhaps unsurprisingly, this has knocked the confidence of many freelancers, with 61% saying they expected the next 12 months to be hard, with an expected fall in their day rate of 11%.  At the start of the pandemic the confidence of freelancers was the lowest on record, and while this has recovered somewhat, it still makes grim reading, with many still concerned about their prospects for the year ahead.

“It’s been clear for some time that the economic impact of coronavirus has fallen particularly hard on freelancers, but in this quarter’s Confidence Index, we can measure just how much,” the researchers say.  “Freelancers’ average incomes have fallen by a devastating 25 per cent since the first quarter of the year – and for many, by even more than that.”

The report highlights how around two thirds of the freelancers covered by the research work through limited companies and were therefore ineligible for any government support during the pandemic.  This has helped to contribute to the pessimistic mood, and has prompted many to quit freelancing.  Indeed, data from the Office for National Statistics suggests that 178,000 fewer people are freelancing now than in the previous quarter.

“Freelancers are a vital and extremely productive part of the workforce who have historically always been essential to recovery from economic depressions,” the researchers conclude. “If they are to play this crucial role, however, the government must make sure that in the event of a second wave, all freelancers have the support they need. Otherwise, going through another full lockdown and the resultant slump in work and income could be utterly devastating for them.”