• Research
• 23 Dec 2022
• Joshua Toovey

• Freelancers’ confidence in their own businesses for the next three months has fallen from -11.4 in Q2 2022 to -17.7 this quarter
• Despite inflationary pressures, the average day rate charged by freelancers has fallen from £528 in Q2 2022 to £503 over the last three months
• Concerningly, freelancers’ quarterly earnings have fallen from £27,486 in Q2 2022 to £25,887 in Q3 2022

Freelancers’ confidence in their own businesses for the next three months has fallen from -11.4 in Q2 2022 to -17.7 in Q3 2022. For context, this represents the lowest level of freelancer confidence in their own businesses for the next three months since the height of the pandemic and lockdown restrictions in Q3 2020.

The index also found that despite the current cost-of-living crisis engulfing the UK amidst rising inflationary pressures, the average day rate charged by freelancers has fallen from £528 in Q2 2022 to £503 over the last three months. In turn, this has now translated into a fall in freelancers’ quarterly earnings, which have fallen from £27,486 in Q2 2022 to £25,887 this quarter.

Factors lowering freelancers’ business performance

When analysing the reasons behind the recent fall in freelancer confidence, the FCI revealed that the state of the UK economy (75.9%) was the most detrimental factor impacting self-employed workers. This can be primarily attributed to the current concerns around the UK economy given two consecutive quarters of economic contraction in GDP and inflationary pressures showing no sign of easing.

The other main issues impacting self-employed workers over the past quarter were interest rates (55.6%) and Brexit (51.5%).

Rising debt and costs

Concerningly, over two in five freelancers (42%) are now incurring business debt which is a small increase on Q2 2022, where 37 per cent of freelancers were incurring business debt.

Almost one in five freelancers (18%) are now incurring debt via credit cards issued in the name of their self-employed business – slightly up from 15 per cent in Q2 2022.

The index also revealed that the majority of freelancers (85%) now expect their business costs to increase over the next 12 months, with freelancers forecasting an average increase of 15.1 per cent in their business costs over the next year.

Read the full report here