Late payment means five million freelance workers turn to payday and short-term loans
The gig economy is made up of two million people and, in 2016, was reported to contribute £119 billion to the UK economy. Freelance numbers have increased by 45% from just under 6.2 million to 8.9 million in 2013, making them the fastest growing group in the EU labour market.
Traditionally perceived as an arena for low-skilled workers ranging from courier drivers through to delivery and taxi drivers, freelance and flexible working hours have undoubtedly spiked as a result of an app economy employing millions across the nation. However, upon evaluating the true spectrum of the freelance job arena, new research into the from ETZ Payments shows that this is in face a misconception.
Zero contract hours have become a lucrative life choice of the middle-classes, brandished under sophisticated terms of consultants, project managers, data scientists and specialists, the world of freelance is far from the confines of low-skilled workers. Prominent sectors to support flexible employees include technology, finance and medicine – all requiring highly skilled, highly resourced professionals.
The study, launched today across 2003 UK adults, shows that 4.3 million middle class (ABC 1) workers have made the jump to working freelance from the traditional nine-to-five. Furthermore, research from Deliveroo found that 44% of the gig economy workforce have university degrees.
- Almost five million working Brits, 15%, have had to turn to payday lenders or short-term finance solutions due to inconsistent payments from their freelance work.
- This rises to 17% of middle-class freelance workers, equating to 3.4 million Brits.
- 23% of British workers, 6.2 million people, work between two to five jobs at one time to support their income.
- This rises to 25% of middle-class workers (ABC1 workers).
- Eight million working Brits, 25%, can’t afford big ticket commitments such as weddings, holidays, and home improvements due to the freelance payment structure.
- This trend translates to a quarter of middle-class workers, representing 4.8 million Brits.
- 13% of Brits, four million working Brits, regularly miss bill payments due to not being paid on time.
- This applies to 2.6 million middle class workers.
- 4.5 million Brits, 14% of Brits, have considered leaving or have left freelance work due to inconsistent or late payments.
- This amounts to 2.8 million middle-class workers (14%).
- Nearly half of the UK workforce, 47% of British workers, would convert from 9-5 to working flexibly if they knew that they would get paid regularly.
- This rises to 52% of middle-class workers – 8.5 million workers.
- Over a third of Brits, 35% of British workers, would rather have flexible working options than a pay rise.
- This applies to 41% of middle-class professionals – 7.4 million workers.
- A third of working Brits, 9.6 million Brits, believe that it’s hard to budget because their monthly payments do not line up with their weekly bills and other outgoings
- This applies to 33% of middle-class workers – 5.8 million Brits.
Despite there being an array of opportunities for highly skilled workers in the gig economy, many are dissuaded from working in the field due to inconsistent and irregular payments. This is unsurprising when research from ETZ Payments shows that 17% of middle-class gig economy workers have been pushed to payday loans as a result of late payments and that many are unable to afford significant payments such as weddings, holidays, and home improvements.
The research shows that the gig economy is not limited to one socio-economic group by any means, but an eclectic mix of community and corporate professionals, with the one common denominator that blights their professional lives under the context of freelance payment.
Despite working in a range of industries, many flexible and freelance workers share the burden of chasing invoices and dealing with inconsistent payment systems. This means that many are missing payments and are being forced to turn to borrowing and short-term finance solutions even though they work in relatively well-paying jobs. It is clear why many freelance workers are becoming disenfranchised and dissuaded from working in a flexible capacity, which could be damaging for an economy that receives so much support from the gig economy.
Nick Woodward, CEO of ETZ Payments commented on the research: “It is startling to see the sheer number of middle-class British workers who are having to leave freelance work due to the ongoing stress of chasing invoices. It should be a norm that in today’s workplace, with modern technology, that freelance workers should be able to complete a job and be paid for it on either the same or next day. Millions of workers are being held back in life because their employers are not paying them properly or on time. This has to change to help people have a more productive and happier work life balance and to support the British economy.”