Half of contractors have financial worries due to pandemic

New data shows that although nearly half of contractors across the UK saw a rise in demand as a direct result of the pandemic, another 50% now have financial concerns.

The joint report from the IPSE and Worksome found that 15.8% of contractors joined the self-employed sector because of the pandemic.

Of these, 57% are earning more than they were in permanent employment and 74% say that they are happier.

However, 24% admit that they’ve had to use most or all of their savings for everyday expenses – this is despite schemes such as the SEISS (Self-Employment Income Support Scheme).

Nearly 1 in 5 (18%) had to use either a credit card or overdraft in order to get them through the pandemic.

Andy Chamberlain, Director of Policy at IPSE, commented,“Today’s research paints a mixed picture of the self-employment landscape. While we at IPSE welcome the increase in demand and the shift from some full-time employees to freelance work, it is clear that COVID-19 has been devastating for contractors.

“After 11 years of continuous growth, the number of self-employed workers has fallen from 5 million in 2019 to 4.1 million in 2021. Moreover, for thousands of those that have remained as freelancers, they have lost work, fallen into debt and been severely impacted by the reforms to IR35 in April 2021.

“As we (hopefully) start to recover from the pandemic, the government needs to clear up the confusion around IR35 and help self-employed workers that have fallen into debt during lockdown.”

Morten Petersen, CEO and Co-Founder, Worksome, added, “While the freelance market may be buoyant again, it’s clear that the darkest days of the pandemic and lockdown will have an impact on the freelance community for years to come. It’s crucial for government, business and civil society to come together to support this group of crucial workers who were not necessarily supported as well financially during the pandemic as others. Meanwhile, unfair tax rules on COVID relief grants continue to penalise this group of often highly skilled workers who contribute £162bn to the UK economy.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.