Freelancers to feel inflationary squeeze 'more than employees'

Freelancers will feel the latest inflation rise particularly acutely compared to employees, a trade body for the self-employed is warning.

In fact, transport costs over the summer was the biggest contributor to the rise, which will hit freelancers harder as they absorb them themselves, unlike employees, said IPSE.

And freelancers who visit clients overseas or within the UK but still over a long distance will be the biggest losers, said IPSE's Jordan Marshall, as air fares shot up by 13.5%.

Even freelancers 'on the road' for a short client commute could fill the squeeze too, as petrol also increased in August, rising by 1.4p per litre on the month to 128.6p per litre.

"[Freelancers] travel more [than employees] to win and work on different contracts," said IPSE, reflecting on inflation in August rising to 2.7%, its highest level in six months.

The Association of Independent Professionals and the Self-Employed added: "Rising inflation also makes it more likely that the interest rate will be raised, potentially hurting self-employed people with property investments".

The upside, however, is that freelancers frustrated by the low rates offered by banks might now benefit from some upwads movement in the interest on their savings.

“Like a lot of people in today’s labour market, many freelancers will struggle to ensure their earnings keep pace with the rising cost of living," said IPSE, hinting any uplift might be only minimal.

“On top of this, the UK’s 4.8 million self-employed also fear extra costs if the government confirms its damaging changes to IR35 tax."

Despite the pressures, freelancers’ underlying confidence in their businesses is still robust, the association has found, with the majority expecting their commercial performance to improve in the next 12 months.

 

21st September 2018

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