Since the Referendum, several surveys and indexes have found that freelancers have significant concerns about how Brexit will affect their earnings and ability to find work. Yet a new report by IPSE (the Association of Independent Professionals and the Self-Employed) and freelance marketplace People Per Hour reveals that the freelance sector enjoyed an earnings boost in Q4 2018—despite the lowest confidence in the UK economy on record.
A crisis of confidence
The Confidence Index, based on the responses of over 600 freelancers from across the UK, found that overall confidence in the performance of the UK economy over the next 12 months dipped to 48.1 in Q4 2018, the lowest level since the index began. Confidence in the following quarter was the second-lowest level on record.
When asked, freelancers said the two factors doing the most to lower business performance (and also confidence) are Brexit and government taxation.
The report found that despite anxiety about the economy, in Q4 2018 freelancers’ average day rates rose by 21% per cent, and their average quarterly earnings rose to £24,776 (the highest level since Q3 2017). Not only that, but 54% of freelancers said they expected their rates to increase further over the coming year.
Why are freelance rates on the rise?
An all-time confidence low doesn’t seem to fit with higher earnings—or an expectation of higher rates in future. So what could be causing this earnings boost?
The report suggests that a recent Recruitment and Employment Confederation (REC) study may have the answer. It suggested that there is a ‘talent gap’ because Brexit uncertainty has made businesses reluctant to take on new permanent staff. This has helped drive up pay, and based on IPSE’s survey, may also be driving up freelancer day rates.
IPSE’s head of research, education and training, Suneeta Johal, welcomed the news of higher rates but warned it was unlikely to last.
“Freelancers’ confidence in the wider economy is down to the lowest level on record because of Brexit and the political turbulence of the last two years.
“The UK’s freelancers may, in the short-term, be benefitting from the pay bump caused by Brexit uncertainty, but in the long-term, ongoing political and economic turbulence can only do them harm.”
She also called the Government’s changes to IR35 legislation “disastrous” and said the current uncertainty for freelancers would be exacerbated by the knowledge that these changes would be pushed through to the private sector.
“The government must scrap the hugely damaging IR35 changes and should also give freelancers and all businesses the security and stability they need on Brexit: by taking ‘no-deal’ off the table, guaranteeing the easy passage of manufacturing goods and by agreeing a coherent and sensible plan for the future of financial services.”
Professor Andrew Burke, Chair of CRSE and Dean of Trinity Business School, Trinity College Dublin, said it was “remarkable” that the freelance sector had achieved such a rise in day rates amidst “the tough economic environment where government fiscal and regulatory policies – as well as the turbulence from Brexit – have been making freelancing more difficult.”
However, he feels that it is predominantly the nature of freelancers themselves that is responsible for the rise—and in turn, responsible for boosting the economy.
“A large part of the credit goes to the effectiveness of freelancers’ business strategies, their brand and reputation-building and also their collaboration with other freelancers and businesses.
“They have helped the sector literally bounce out of a recession (two-quarters of negative growth).”
Has Brexit affected your earnings and capacity to find work—either positively or negatively? How do you view your career prospects post-Brexit? Share your experiences with us and comment below.