• Average freelancer day rates have significantly fallen, decreasing from £547 in Q1 2024 to £457 this quarter
• Freelancers are slightly more confident in the UK economy for the next 12 months compared to Q1 2024
• Freelancers are also now slightly less confident in their own businesses for the next 12 months compared to the previous quarter
• Freelancers' spare capacity has increased from 2.2 weeks without work per quarter in Q1 2024 to 3.5 weeks this quarter, meaning freelancers are now working less

Despite confidence in the UK economy slightly improving, the average day rate charged by freelancers has fallen dramatically since Q1 2024. Concerningly, freelancers are now also likely to be working less compared to last quarter which perhaps explains the falling confidence levels amongst freelancers for their own businesses.

Interestingly, whilst business debt remains around the same level as in Q1 2024, almost one in six (57%) expect their business costs to increase in the coming year.

Freelancers’ confidence in their own businesses for the next three months has now decreased since last quarter. In fact, confidence has decreased from -13.2 in Q1 2024 to -18.6 this quarter, following a decrease in confidence reported between Q4 2023 and Q1 2024 (decreasing from -18.2 in Q4 2023 to -13.2 in Q1 2024).

Freelancers’ confidence in their own businesses for the next three months has decreased for all three SOC groups.

SOC1 managerial freelancers reported the biggest decrease, decreasing from -26.0 in Q1 2024 to -35.9 in Q2 2024.

SOC2 professional freelancers also reported a fall in confidence, decreasing from -21.4 in Q1 2024 to -22.3 in this quarter.

SOC3 associate professional and technical freelancers, likewise, reported a decrease in confidence, falling from 2.4 in Q1 2024 to -4.4 this quarter.

Looking at freelancers’ confidence for the next 12 months now reveals that freelancers are slightly less confident in their own businesses. Confidence has now decreased from -18.8 in Q1 2024 to -22.3 this quarter.

This is driven by decreases in confidence to both SOC1 managerial freelancers and SOC3 associate professional and technical freelancers, with confidence for these groups decreasing from -30.0 in Q1 2024 to -38.6 and from 0.0 in Q1 2024 to -5.4 in Q2 2024.

SOC2 professional freelancers, however, reported a slight increase in their confidence for the next 12 months, with confidence increasing from -31.6 in Q1 2024 to -29.6 this quarter.

We now move on to explore the factors that freelancers identify as having an influence on their business performance. In terms of negative determinations, freelancers continue to cite the same three factors lowering their business performance in the same order.

Freelancers continue to cite state of the UK economy (65.7%) above government tax policy relating to freelancing (63.3%) as the first and second most detrimental factors impacting their business performance.

In third, freelancers cited government regulation relating to hiring freelancers, with 62.7 per cent of all freelancers reporting this as a factor that is lowering their business performance.

Turning to the positive influences on business performance, this quarter reveals that whilst all the negative factors were external, the factors enhancing freelancers’ business performance remain largely internal.

In line with our findings from last quarter, the top factor enhancing freelancers’ business performance remains unchanged this quarter. Brand value and reputation in the market continues to be the top factor positively influencing freelancers’ business performance, with 63.2 per cent citing this in this quarter.

Innovation in terms of the services offered to clients was the second most positively enhancing factor for freelancers’ business performance this quarter, with 55.8 per cent citing this.

Collaboration with other freelancers and businesses is now the third most enhancing factor for freelancers’ business performance, with 54.3 per cent reporting this in Q2 2024.

Freelancers’ quarterly confidence in the UK economy for the next three months has increased from Q1 2024, increasing from -27.6 in Q1 2024 to -15.0 this quarter.

This is driven by increased in confidence reported by all three SOC groups.

SOC1 managerial freelancers reported the biggest increase in confidence since Q1 2024, increasing from -34.6 in Q1 2024 to -16.2 this quarter.

SOC3 associate professional and technical freelancers also reported an increase in their confidence, increasing from -19.6 in Q1 2024 to -10.6 in Q2 2024.

SOC2 professional freelancers reported a smaller increase, increasing from -31.5 in Q1 2024 to -19.0 in Q2 2024.

Now looking at confidence in the UK economy for the next 12 months, freelancers are now slightly more confident compared to Q1 2024. In fact, confidence has increased from -32.2 in Q1 2024 to -15.6 this quarter. This follows a decrease in confidence between Q4 2023 and Q1 2023, where confidence fell from -30.1 in Q4 2023 to -32.2 in Q1 2024.

This is driven by a significant increase in confidence amongst SOC1 managerial freelancers, increasing from -40.4 in Q1 2024 to -20.3 this quarter.

SOC2 professional freelancers also reported an increase, increasing from -37.8 in Q1 2024 to -19.3 this quarter.

SOC3 associate professional and technical freelancers, likewise, reported an increase in their confidence for the next 12 months, increasing from -21.7 in Q1 2024 to -9.2 in Q2 2024.

This quarter, the average day rate charged by freelancers over the last three months stands at £457, which represents a significant decrease on our findings from Q1 2024 (£547).

Looking at the SOC groups more closely and comparing the findings to Q1 2024 reveals that all three SOC groups have decreased their average day rates since last quarter.

SOC1 managerial freelancers reported the biggest decrease, with their average day rates decreasing from £644 in Q1 2024 to £457 this quarter.

SOC3 associate professional and technical freelancers also reported a decrease, with their average day rates decreasing from £607 in Q1 2024 to £596 in Q2 2024.

Similarly, SOC2 professional freelancers reported a small decrease in their average day rates, decreasing from £607 in Q1 2024 to £596 this quarter.

In terms of quantifying the expected change in day rates, 27 per cent of freelancers now expect an increase in their average day rates for the next 12 months.

When asked to quantify the expected change to their day rates, freelancers expect their day rates to increase by 27.2 per cent in the next 12 months.

Freelancers’ spare capacity has increased significantly since Q1 2024, increasing from 2.2 weeks without work per quarter in Q1 2024 to 3.5 weeks this quarter, meaning freelancers are now working less.

This decrease in freelancers’ spare capacity is driven by an increase in the spare capacity of all three SOC groups.

SOC1 managerial freelancers reported an increase in spare capacity, increasing from 2.4 weeks without work in Q1 2024 to 3.6 weeks in Q2 2024.

SOC2 professional freelancers also reported an increase, increasing from 2.5 weeks without work in Q1 2024 to 3.2 weeks this quarter whilst SOC3 associate professional and technical freelancers also saw an increase on last quarter, increasing from 1.8 weeks without work to 3.7 weeks this quarter.

This quarter, average quarterly earnings over the last three months stands at £21,591, which represents a significant on our findings from Q1 2024 (£29,853).

This is driven by all three SOC groups reporting a decrease in their average quarterly earnings compared to last quarter.

SOC1 managerial freelancers reported the biggest decrease in their average quarterly earnings, decreasing from £32,478 in Q1 2024 to £20,341 in Q2 2024.

SOC2 professional freelancers also reported a decrease in their average quarterly earnings, decreasing from £31,886 in Q1 2024 to £29,145 this quarter.

Finally, SOC3 associate professional and technical freelancers reported a decrease compared to last quarter, falling from £26,344 in Q1 2024 to £15,365 this quarter.

Almost six in ten freelancers (57%) now expect their input costs to increase over the next 12 months.

A further 31 per cent of freelancers forecast no change in their input costs for the next 12 months. Interestingly, just 3 per cent of freelancers could foresee a decrease in their business costs for the next 12 months.

In terms of quantifying the expected change in input costs for the next 12 months, freelancers now predict that their input costs will increase by 11.6 per cent.

The percentage of freelancers incurring business debt has increased slightly since Q1 2024, with 30 per cent of freelancers now incurring business debt compared to 29 per cent in Q1 2024.

Freelancers are now more likely to be incurring business debt via credit cards as they were in Q1 2024, with this figure increasing from 14 per cent in Q1 2024 to 17 per cent this quarter.

This quarter, job-related stress levels have increased slightly 5.85 in Q1 2024 to 5.92 this quarter (on a 10-point scale where zero is not at all stressed and 10 is extremely stressed). This is driven by increases to SOC1 managerial freelancers and SOC2 professional freelancers.

SOC1 managerial freelancers reported an increase in their job-related stress, increasing from 5.52 in Q1 2024 to 5.65 in Q2 2024 whilst SOC2 professional freelancers increased from 5.66 in Q1 2024 to 6.26 this quarter.

On the other hand, SOC3 associate professional and technical freelancers reported a decrease in their job-related stress from 6.24 in Q1 2024 to 5.78 this quarter.

Job satisfaction has decreased slightly since last quarter, decreasing from 6.16 in Q1 2024 to 5.87 this quarter (on a 10-point scale where zero is not at all satisfied and 10 is extremely satisfied).

SOC3 associate professional and technical freelancers reported a decrease in their job satisfaction, falling from 6.48 in Q1 2024 to 5.94 this quarter.

SOC1 managerial freelancers also reported a decrease in their job satisfaction, falling from 6.17 in Q1 2024 to 6.03 in Q2 2024.

On the other hand, SOC2 professional freelancers reported a small increase in their job satisfaction, increasing from 5.80 in Q2 2024 to 5.94 this quarter.

Freelancers continue to forecast an increase to their business costs in the coming year, with this in turn leading to a fall in their own business confidence. It's also clear that the sector is preparing for costs to only increase and remain sceptical about the performance and growth of the economy in the next year.

Concerningly, freelancers have also reported a dramatic decrease in their average day rates compared to last quarter and it will be important to monitor this over the next few quarters.