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.

Workwell, a leading provider of services to flexible workers and recruiters in the UK and overseas, collaborated with IPSE, a community of over 35,000 self-employed people.

The research found 58% of contractors, freelancers and small business owners have not increased their day rates in the past 12 months while 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 but around 45% said they do not have a day rate.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

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 while 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%.

Commenting on the findings, Workwell head of accountancy services, Chris Mollan, 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 which should apply to contractors, freelancers and small business owners 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.”