A new poll has found that self-employed workers are less stressed and more confident about their own prospects as they anticipate a significant rise in day rates over the next 12 months.
Despite record levels of inflation and fears of an impending recession, new research from the Association of Independent Professionals and the Self Employed (IPSE) has revealed that freelancers’ confidence in their own businesses, in the next three months, has risen significantly, from -11.0 in Q4 2021 to 2.2 in Q1 2022. The growth in confidence represents a return to positive figures for the first time since Q2 2021.
The IPSE Confidence Index surveys IPSE and PeoplePerHour members on the state of the UK’s self-employed sector, tracking confidence in their own freelance businesses, the UK economy and other key economic indicators such as average day rates, quarterly earnings and business debt.
In Q1 2022, the index found that freelancers expect their day rates to increase by an average of 13.5% over the next 12 months. This represents a significant increase from Q4 2021, where self-employed workers anticipated an increase of just 3.6%.
The index has also found that freelancers are increasingly satisfied with their work, job-related stress has fallen to its lowest levels since Q3 2019 and job satisfaction has improved.
However, confidence in the economy remains low. The findings show that freelancers’ confidence in the UK economy for the next three months has increased only slightly from -23.7 in Q4 2021 to -23.1 this quarter.
In fact, the state of the UK economy is the most detrimental factor (64.7%) on freelancers’ business performance, largely because of the cost of the living crisis driven by rising inflation, the war in Ukraine, Brexit and rising energy and goods prices as well as heightened fears of an economic recession. The other main factors impacting freelancers last quarter were government tax policy (62.1%) and regulations relating to hiring freelancers (59.2%).
Derek Cribb, ceo of IPSE, said: “After a mixture of pandemic uncertainty and post COVID-19 inflation, life for freelancers is finally starting to look up. Work is returning, confidence in their own business is growing and stress is falling rapidly. In other words, the dynamism and energy of the self-employed sector is finally beginning to rear its head once more.
“However, freelancer confidence should not be taken for granted. The cost-of-living crisis is still wrecking the UK economy and the government needs to ensure that self-employed workers aren’t pulled back into the abyss.”
Concerningly, the report also found that the majority of freelancers (86%) now expect their input costs to increase over the next 12 months - up from 81% in Q4 2021. It also found that 39% of freelancers are now incurring business debt (up from 38% in Q4 2021), with 16% incurring debt via credit cards issued in the name of their self-employed business.
Written by Rachel Miller.