The Cost of COVID: How the pandemic is affecting the self-employed

  • Research

The lockdown and the other circumstances of the pandemic have led to a freelancer financial crisis. Many freelancers are missing out on support, struggling with increasing levels of late payment and burning through their savings to get by. This has severe consequences not only for their financial futures, but also for their mental health and wellbeing.

Worryingly, it seems that the most severe financial crisis is among more vulnerable groups including younger freelancers and those with lower incomes. The crisis also seems to be affecting female freelancers more than men.

Previous research by IPSE showed that the average freelancer has seen a 31 per cent drop in income since last year. However, of those surveyed for this research, over half (56%) said they had not accessed government support – either because they could not or for a range of other reasons.


Many freelancers’ financial situations also seem to have worsened because of an increase in the prevalence of late payment. This is not a new issue with over half of freelancers (56%) saying they have experienced late payment at some point in their career. However, since the pandemic began, over a third of freelancers (36%) say late payments are becoming more common, leaving even more of them financially insecure.

Late payment has done significant financial harm to many self-employed people during the pandemic. Almost a quarter of freelancers who had been paid late (23%) said they used up most or all of their savings as a result, while a fifth (22%) had to resort to credit cards or overdrafts to get by. Worryingly, 17 per cent of freelancers said late payment left them without enough money to cover work expenses and one in six (15%) said they did not have enough to cover living costs. Women, younger and lower paid freelancers were more likely to be in both of these situations.

Late payment is also having a significant impact on mental health. Half (48%) of freelancers who were paid late said they were left feeling stressed or anxious and a third (31%) said they lost sleep over it. Female freelancers were more likely than men to report late payment having a negative impact on their mental health.

As a result of these difficult financial circumstances – fuelled by coronavirus and a rise in instances of late payments – a quarter of freelancers (27%) have burned through most or all of their savings to get by. Just under a quarter (23%) said they had used credit cards to support themselves, while a fifth (20%) took money out of their businesses and one in seven (14%) used their overdrafts. One in ten even had to borrow from friends and family (11%) or sell items they owned (10%).


Women, younger and lower paid freelancers were all more likely to have borrowed money from family and friends. Women and younger freelancers were also more likely to have sold items to support themselves. Younger freelancers were more likely, too, to have used most or all of their savings to get by.

These financial difficulties are likely to lead to ongoing problems for many freelancers – in particular when they face their next tax return. Although almost half (47%) said they have been putting money aside throughout the year to prepare for their tax return, nearly a fifth (18%) said they will have to borrow money to pay their taxes, while one in seven (14%) have not started saving to pay their taxes and will start closer to the deadline.

Read the full report here


Meet the authors

Chloe Circle.png
Chloe Jepps

Head of Research

Inna Yordanova

Senior Researcher