Almost two-thirds of self-employed professionals in the UK have seen their incomes squeezed by the coronavirus crisis, according to a new survey.
New figures by LinkedIn, shared exclusively with Yahoo Finance UK, suggest many workers and particularly freelancers have had to rely on personal savings, with work drying up because of the pandemic.
The data comes as the UK government rolls out its crisis support grants for the self-employed, announcing on Monday it will begin taking the first claims from 13 May.
A survey of more than 1,000 LinkedIn users showed freelancers in professional jobs were more than twice as likely to report falling incomes than full-time employees.
The data, from the site’s recently launched fortnightly workforce confidence index, shows 64% of self-employed respondents highlighting a recent decline in earned income. Some 28% of full-time employees said they had seen their wages drop, while 45% of part-time employees said the same.
The self-employed appeared most likely to resort to using their savings. Half said their savings had declined, compared to 41% of part-time employees and 28% of full-time employees.
Around two-thirds of both freelancers and the self-employed had slashed their personal spending. A majority (56%) of those in full-time work also reported a decline in their outgoings, though the trend could reflect lockdown curbs on ‘non-essential’ activities as much as financial pressures.
Evidence suggests workers in many low-paid, non-professional jobs are far more likely to have seen their sectors and jobs threatened by the lockdown. But the new survey indicates even many professionals, often better paid and more able to work remotely, have been hit hard by the crisis.
Emily Spaven, UK editor at LinkedIn, said the pandemic’s economic consequences were having a “real impact” on professionals’ finances.
She told Yahoo Finance UK: “With many members reporting that their incomes are down and that they’re already having to use their personal savings, it’s no surprise that people are being cautious and cutting their spending.
“It’s also clear that the self-employed and those working for smaller businesses are feeling some of the harshest financial consequences of the pandemic.”
The UK government has sought to help the self-employed through the crisis, with a scheme allowing them to claim a grant based on their average monthly profits. Applicants can receive government cash for 80% of their usual income for three months, capped at £7,500.
It has faced criticism for not rolling out the scheme and getting cash to workers faster. But lobby groups for the self-employed welcomed an announcement on Monday that workers can check online in advance if they are eligible and when they can claim.
Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), said the early notice was “excellent” but called for payment to be brought forward.
He also said the government must not “lose sight” of the many workers who are not eligible for the scheme, including the newly self-employed, limited company contractors and those with recent earnings of more than £50,000 a year
“The self-employed are an extremely varied and vital section of the workforce and the government must keep innovating until it has pulled all parts of it out of the mire,” he added.
The LinkedIn index also ranked workers’ reported confidence levels about being better off or worse off in different sectors.
Respondents in construction, healthcare, IT and manufacturing were the most confident, though more workers thought they would be worse-off than better off in every industry. Workers in recreation, travel, media and communications were the most pessimistic.