Freelancer Confidence Index hub

IPSE’s Confidence Index is a quarterly report that tracks the business performance and economic outlook of freelancers across the UK. It is the only established index of its kind, using rigorously tested methodology and a representative sample of the freelance sector. 
The index was created both to inform policy on freelancers and to ensure that their vital contribution is understood and recognised. The aim is for the Confidence Index to be the authoritative indicator used by policymakers at the heart of industry and government.

Confidence timeline

Freelancers' confidence in their business and the UK economy

2022 Q3 key findings

20.3

Freelancers' confidence in their own businesses for the next 12 months has fallen from -18.5 in Q2 2022 to -20.3 this quarter

8.6%

Freelancers report that the state of the UK economy (75.9%) was the most detrimental factor impacting self-employed workers

-56.4

Freelancers' confidence in the UK economy over the next three months has fallen from -46.2 in Q2 2022 to -56.4 this quarter

77.8%

Freelancers report that their average quarterly earnings have fallen from last quarter, falling from £27,486 in Q2 2022 to £25,887 in Q3 2022

Latest report

Freelancer Confidence Index Q3 2022

Freelancers’ confidence in their own businesses for the next 12 months has fallen sharply from -18.5 in Q2 2022 to -20.3 this quarter. For context, this represents the lowest level of freelancer confidence in the economy since the early days of the pandemic in Q3 2020. When analysing the reasons behind the recent fall in freelancer confidence, the FCI found that the UK economy (75.9%) was the most detrimental factor impacting self-employed workers. This can be attributed to the fact that the UK has fallen into an economic recession amid rising inflationary pressures.

Freelancer Confidence Index Q3 2022

2022 Q2 key findings

56.7

 Freelancers' confidence in the UK economy for the next 12 months has fallen sharply from -27.4 in Q1 2022 to -56.7 this quarter

8.6%

Freelancers expect their day rates to increase by an average of 8.6% over the next 12 months

-11.4

Freelancers' confidence in the UK economy for the next three months has decreased from 2.2 in Q1 2022 to -11.4 this quarter

77.8%

Freelancers report that the state of the UK economy (77.8%) was the most detrimental factor impacting self-employed workers

FCI Q2

Freelancer Confidence Index Q2 2022

Freelancers’ confidence in the UK economy for the next 12 months has fallen sharply from -27.4 in Q1 2022 to -56.7 this quarter. For context, this represents the lowest level of freelancer confidence in the economy since the early days of the pandemic in Q1 2020. When analysing the reasons behind the recent fall in freelancer confidence, the FCI found that the UK economy (77.8%) was the most detrimental factor impacting self-employed workers. This can be primarily attributed to the cost of the living crisis engulfing the UK as a result of rising inflation, the war in Ukraine, Brexit and rising energy and goods prices combined to heighten fears of an economic recession.

Freelancer Confidence Index Q2 2022

2022 Q1 key findings

-23.7

Freelancers' confidence in their own businesses for the next three months has risen from -11.0 in Q4 2021 to 2.2 this quarter.

29,574

Freelancers expect their day rates to increase by an average of 13.5% over the next 12 months.

£584

Freelancers' confidence in the UK economy for the next three months has increase only slightly from -23.7 in Q4 2021 to -31.1 this quarter.

81%

of freelancers now predict that business costs will rise over the next 12 months.

FCI Q1

Freelancer Confidence Index Q1 2022

Despite record levels of inflation and rumours of a global economic recession in the first quarter of 2022, freelancers’ confidence in their own businesses for the next three months has risen from -11.0 in Q4 2021 to 2.2 this quarter. For context, the growth in confidence represents a return to positive figures for the first time since Q2 2021. However, freelancers remained concerned about the state of UK economy, with 64.7 per cent citing this as the most detrimental factor affaceting their business performance.

Freelancer Confidence Index Q1 2022

2021 Q4 key findings

-23.7

Freelancers' confidence in the UK economy has significantly decreased compared to last quarter - falling from -16.3 in Q3 2021 to -23.7 in Q4 2021.

29,574

Freelancers' average quarterly earnings have risen to £29,574 this quarter.

 

£584

Freelancers' day rates have increased from £537 to £584.

81%

of freelancers now predict that business costs will rise over the next 12 months.

 

 

FCI Q4

Freelancer Confidence Index Q4 2021

In the final quarter of 2022, freelancer confidence in the UK economy and in their own business has fallen dramatically, despite reporting increases to their day rates and quarterly earnings. The report also reveals that worries about the cost of living and rising inflation have resulted in 81 per cent of freelancers predicting that business costs will rise over the next 12 months.

Freelance Confidence Index Q4 2021

2021 Q3 key findings

-2.6

Freelancers' 12-month confidence in their own businesses has returned to negative levels.

-13.2

Freelancers' 12-month confidence in the UK economy has also returned to negative levels

 

£537

Freelancers' average day rates have now increased to their highest levels since the establishment of the Confidence Index in 2014.

£24,606

Freelancers' average quarterly earnings have increased to their highest levels since Q4 2018.

 

 

FCI Q3

Freelancer Confidence Index Q3 2021

In the third quarter of 2021, freelancers were feeling far more anxious about the performance of the UK economy and their own freelance businesses, despite reporting increases to their day rates and quarterly earnings. The report also reveals that government tax policy relating to freelancing is now cited as the top factor negatively influencing freelancers' business performance as a result of the IR35 changes in the private sector.

Freelance Confidence Index Q3 2021

2021 Q2 key findings

0.2.png

Freelancers' 12-month confidence in their own businesses has increased to its highest level since 2015.

72.9.png

Freelancers' 12-month confidence in the UK economy has increased to its highest level since the establishment of the Confidence Index in 2014.

 

27.png

More than 1 in 3 freelancers are now incurring business debt.

3.7.png

Freelancers’ day rates have decreased by 11 per cent since Q1 2021.

 

 

FCI Q2

Freelancer Confidence Index Q2 2021

In the second quarter (Q2) of 2021, freelancers were feeling extremely opitimistic about the performance of the UK economy and their own freelance businesses, despite reporting decreases to their day rates and quarterly earnings. The report also reveals that the coronavirus pandemic is once again cited as the top factor negatively influencing freelancers’ business performance and freelancers are now incurring greater levels of debt.

Freelance Confidence Index Q2 2021

2021 Q1 key findings

0.2.png

Freelancers' 12-month confidence in the UK economy has increased to its highest level since 2015. 

72.9.png

Government regulation relating to hiring freelancers is now the top factor negatively influencing freelancers’ business performance.

27.png

More than 1 in 4 freelancers are now incurring business debt.

3.7.png

Freelancers’ spare capacity recovered for the third quarter in a row.

FCI Q1

Freelancer Confidence Index Q1 2021

In the first quarter (Q1) of 2021 freelancers were feeling more optimistic, with confidence in the UK economy reaching the highest levels since 2015. The report also reveals that freelancers are now working more and earning more with spare capacity decreasing and day rates increasing respectively for all SOC groups. The changes to IR35 remain a large concern amongst highly skilled freelancers and government regulation relating to hiring freelancers is now cited as the top factor negatively influencing freelancers’ business performance.

Freelancer Confidence Index Q1 2021

2020 Q4 key findings

Key findings - 27.7.png

Freelancers’ 12-month confidence index in the UK economy has increased to its highest level since 2017.

Key findings - 73.9.png

Coronavirus continues to be the top factor negatively influencing freelancers’ business performance.

Key findings - 4.3weeks.png

Freelancers’ spare capacity recovered slightly for the second quarter in a row but remained very high at 4.3 weeks.

Key findings - -9.1.png

Freelancers expect an average decrease of 9.1% in their day rates over the next 12 months.

FCI Q4

Freelancer Confidence Index Q4 2020

In the fourth quarter (Q4) of 2020 freelancers were beginning to feel more optimisic  with  confidence in both the economy and their businesses increasing. However, the report reveals that although freelancers were on average working more this quarter compared to Q3, they were working for lower day rates. There are also large concerns amongst highly skilled freelancers about government tax regulations in the wake of the IR35 changes due to come into force in April 2021. 

Freelancer Confidence Index Q4 2020

2020 Q3 key findings

Key findings - 56.2.png

Freelancers’ 12-month confidence index in the UK economy remains in deep negative territory at -56.2 this quarter.

Key findings - 80.png

Coronavirus continues to be the top factor negatively influencing freelancers’ business performance.

Key findings - 5weeks.png

Freelancers’ spare capacity recovered slightly from Q2 2020 (5.5 weeks) but remained very high at 5 weeks.

Key findings - 12.6.png

Freelancers expect an average decrease of 12.6% in their day rates over the next 12 months.

FCI Q3

Freelancer Confidence Index Q3 2020

In the third quarter (Q3) of 2020, freelancers continue to feel the impact of the coronavirus pandemic. Although their spare capacity has decreased very slightly from 5.5 weeks to 5 weeks this quarter, the lack of work continues to have a negative impact on earnings. Furthermore, freelancers expect an average decrease of 12.6% in their day rates over the next 12 months.

Freelancer Confidence Index Q3 2020

Longitudinal report

How freelancers respond to an uncertain economy: ​​​​​​​A longitudinal report on seven years of Confidence Index data

This longitudinal report is the culmination of seven years’ worth of Confidence Index research and analysis. For the first time, we are able to look back and examine the trends. We can see the effect that political decisions and macro-economic variables have had on freelancers’ confidence and understand the impact of these factors by setting them in the wider context over a longer period of time.

View longitudinal report

2020 Q2 key findings

 

info-53-4.png

Freelancers expect the UK economy to deteriorate even further in the next year, with a 12-month UK economy index score of -53.4.

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The coronavirus pandemic (81.1%) is now not only the top negative influence on freelancers’ businesses, but it is also selected as a top factor by all three freelancer occupational groups.

 

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In Q2 2020, freelancers’ spare capacity reached an unprecedented record high of 5.5 weeks, increasing substantially since Q1 2020 when it was at 3.3 weeks.

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The great decline in capacity utilisation alongside a slight fall in day rates led to a large 25 per cent drop in quarterly earnings from £20,821 in Q1 2020 to £15,709 in Q2 2020.

 

 

FCI Q2

Freelancer Confidence Index Q2 2020

In the second quarter (Q2) of 2020, freelancers’ average income dropped by a record 25 per cent, according to the latest Freelancer Confidence Index.

The drop in income was driven by a sharp fall in the average number of weeks freelancers worked this quarter. Between March and June, the average freelancer went 5.5 weeks out of 13 without work. Combined with a 3 per cent fall in freelancers’ average day rates, this led to average quarterly earnings declining by 25 per cent from £20,821 in Q1 2020 to £15,709 in Q2 2020.

 

Freelancer Confidence Index Q2 2020

2020 Q1 key findings

 

FCI stat -57.3.png 1

The 12-month freelancer business confidence index fell substantially from -23.2 to -57.3, showing that freelancers expect the deterioration of their business performance to continue over the next year.

FCI stat 8.4.png

Freelancers’ earnings have also fallen by 8.4 per cent over the first quarter of 2020.

 

FCI stat 20.png

Freelancers expect a further decrease of 20% in their day rates over the next year.

FCI stat 3.3 weeks.png

Freelancers’ spare capacity amounts to 3.3 weeks in Q1 2020, which is the second highest level of spare capacity since surveys began.

FCI Q1

Freelancer Confidence Index Q1 2020

The first quarter (Q1) of 2019 has proven to be very tough for freelancers as they have experienced a 17 per cent decline in income comprised of both a fall in their day rates and the volume of business undertaken. 

Day rates have declined by 15 per cent from £474 to £405 while spare capacity has risen by four percentage points from 21 per cent to 25 percent.

 

Freelancer Confidence Index Q1 2020


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