Workwell & IPSE research shows the average day rate for contractors, freelancers and small business owners is around £300 – but nearly half say they don’t have daily rate for work.

Around two out of three contractors, freelancers and small business owners have not increased their day rate in the past year despite the impact of inflation , new research* from Workwell & IPSE shows.

Latest Government data** shows pay for employees rose at a record 7.3% but the study by Workwell & IPSE found day rates for self-employed workers are not keeping pace.

The research found:

• 58% of contractors, freelancers and small business owners have not increased their day rates in the past 12 months
• 9% have even cut their rates
• Only a quarter (24%) of those who have not raised day rates plan to do so in the next 12 months
• Around six out of 10 (59%) say then will not increase their day rate while 17% didn’t want to say
• The study found the average day rate charged by contractors, freelancers and business owners questioned was around £300
• Around 45% of those surveyed said they do not have a day rate
• The biggest reason for raising the day rate among those planning to or who have already done so is rising costs. Around 58% said they increased or plan to increase their rate because of cost pressures while 42% made the move because of the cost of living and rising inflation
• Around a third (32%) say they have expanded their offering
• 21% say the level of competition in their sector means they can increase their rate
• However 11% who raised their rate admit they were undercharging previously
• Among those who have increased their day rate the average increase was 10%.

Chris Mollan, Head of Accountancy Services at Workwell said: “The cost of living crisis is hitting everyone and contractors, freelancers and small business owners are not immune so it is surprising to see so few increasing their day rates in response.

“Pay rises are at a record level for employees which demonstrates that employers are willing to pay extra for workers they value who are providing important services.

“Keeping running costs down is important for contractors, freelancers and small business owners if they are not going to increase their day rate and that should include ensuring they have the best possible business support.”

* Workwell commissioned independent research agency Viewsbank to interview 1,447 adults aged 18-plus between July 6th and 18th 2023 including 398 who are self-employed, freelancers or contractors
** Labour market overview, UK – Office for National Statistics (ons.gov.uk)