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ONS figures reveal impact of COVID on freelancers’ finances

Businessman putting money in a masked piggy bank, saving during coronavirus pandemic concept

New figures from the Office for National Statistics (ONS) covering the financial year 2020-2021 have revealed the impact of the COVID-19 pandemic on the household finances of self-employed workers in the UK.

One of the report’s core findings was that self-employed people now found it harder to make ends meet than they did prior to the pandemic. In 2019-2020, 67 per cent of freelancers said that they found it “very easy”, “easy” or “fairly easy” to make ends meet.

By March 2021, this figure had declined slightly to 66 per cent. In comparison, during a year of widespread working from home, employed workers have found it easier to make ends meet, with the figure for full-time employees rising from 72 per cent in 2020 to 80 per cent this year.

This disparity between self-employed workers and employees continued throughout the report. At the end of March 2021, 28 per cent of freelancers reported reduced working hours, in comparison to just 5 per cent of employees.

There was also a sharp contrast in those who had seen reduced income during the COVID-19 pandemic. More than a third of self-employed workers (34 per cent) said that they had seen reduced income during the pandemic, compared to 10 per cent of employed workers.

Borrowing money was also more common among the self-employed during the pandemic, with freelancers more than twice as likely to borrow money during 2020-21 as employees.

More recent ONS data, for the week to August 1 2021, found that freelancers (7 per cent) were more likely to dip into their savings than employees (3 per cent).

The ONS said that this potentially reflected the fact that self-employed workers were more likely to have healthier savings, with 76 per cent of self-employed households saying they have sufficient finances to cover a 25 per cent drop in household income and 61 per cent saying they could cover a 75 per cent drop in income for three months.

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