Fall in inflation 'unlikely to ease freelancers' financial fears'

A drop in inflation has been welcomed for freelancers, despite it probably not reducing enough to ease the financial and future worries of such people who work independently.

Reflecting on inflation falling from 2.7 per cent to 2.4 per cent in September, freelance group IPSE said it meant that the self-employed and others would feel "more money in their pocket."

So income, in real-terms, is higher thanks to the inflationary fall, which was driven by lower prices for food and soft drinks, as well as transport -- a cost freelancers can feel disproportionately.

But the cheaper prices, which extended to recreation and culture, and their easing of pressure on the Bank of England to raise interest rates, coincide with "black clouds".

These are forming "on the horizon", according to IPSE's Andy Chamberlain, and contain "no clear plan" to shield freelancers from Brexit's fallout, but a suspected plan to reform IR35

"The government should prioritise the wellbeing of the self-employed sector as we enter this crucial time for the economy," he said.

"That means reversing its position on IR35 changes in the private sector, or, at the very least, delaying any changes until 2020 at the earliest."

Yet even without these incoming squeezes, each of which have the potential to dwarf the impact of inflation reducing a notch, the self-employed have a gloomy financial outlook.

Responding to questions posed by researchers for the Association of Independent Professionals and the Self-Employed (IPSE), almost eight in 10 freelancers said they were concerned that the money they have -- or will save -- is not going to last.

Although almost as many (about seven in 10) insisted they were ‘enjoying life due to how they are managing their money,’ half of them, overall, said they had felt "anxious" or "stressed" about their financial situation.

“It’s good news for the self-employed and the wider country that inflation is falling towards the Bank of England’s target rate of two per cent," said Mr Chamberlain.

"[But] government IR35 tax policy is still a major worry for self-employed people...[and our] quarterly survey which tracks the income, confidence and attitudes of the self-employed, has shown a moderate decline in earnings this year.”

 

18th October 2018

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