UK freelancer economy booms as cost of living crisis bites The number of workers interested in freelancing has tripled in just one year, as the rising cost of living reduces employee spending power. Written by Helena Young Updated on 7 July 2023 Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer One third of company employees are considering doing part-time work alongside their main job, representing astonishing year-on-year growth in the UK’s freelancer economy.The findings come from Aspire, a recruitment agency which conducts a quarterly survey of 900 workers to measure sentiment within the UK jobs market.Last month, the Bank of England hiked interest rates to 5% – the thirteenth month in a row that rates have been raised – signalling the continuation of the cost of living crisis. Aspire found that 33.6% of workers plan to lean on their skills and knowledge to boost earnings.The growth in candidates seeking freelance roles has tripled compared to the same period in 2022. Then, just one in ten (9.5%) candidates were considering freelancing or contracting as their next career move.Unstable economy triggers employment anxietiesThe Aspire survey shows that the number of candidates interested in this way of working has increased dramatically over the last 12 months, suggesting it is primarily being driven by the cost of living crisis.Interest in becoming a freelancer grew from 9.5% to 31.3% by October last year, and sat at 33.6% by April this year.For freelance workers – otherwise known as ‘multi-income individuals’ – starting a side hustle offers an opportunity to offset the impact of inflation, which has seen real wages fall at amongst the fastest rates in over 20 years.Some workers reported feelings of low job security in the first quarter of 2023, due to mass layoffs across multiple sectors including retail and tech.More than a third of UK workers have already admitted to lining up a ‘Plan B’ job in the face of mounting uncertainty about secure employment.Freelancer boom reflects growing demand for flexible workingFreelancing offers individuals the opportunity to earn additional cash around their full-time work. Its growth in popularity can therefore be linked to the advent of remote and hybrid work that has brought greater work-life balance to many company employees.The freelancing ‘be your own boss’ mentality means people can choose when and where they work for full flexibility over their work arrangements. Office for National Statistics (ONS) data shows that most UK sole traders have ditched the office in favour of working from home.This makes it of particular interest to younger workers, the group which shows the biggest preference for improved work-life balance.This entrepreneurial attitude is good news for the UK economy in the short and long term, giving workers additional income now and a potentially viable and successful business in the future.Terry Payne, Global Managing Director at Aspire, said: “Candidates turning to side hustles are finding ways to explore how their passions and personal interests can provide additional income, either to manage rising costs now or – excitingly – as the beginnings of a successful business in its own right.”Nonetheless, employers should take note of the potential toll that a second job could have on employee health and wellbeing – particularly if it is being triggered by financial stress.If a large number of staff members are turning to freelancing due to money troubles, this should provide impetus for business owners to reexamine their employee benefits and perks package to review how well it is supporting workers.How to become a freelancerResearch by Yell shows that freelancing is the second most popular side hustle in the UK. Becoming a freelance copywriter or graphic designer are two of the most common avenues chosen by ambitious employees.Freelancing can be rewarding but it can also be precarious. Half of contractors say they have considered quitting due to late payments from clients. Plus, unlike full-time employment, freelance work does not guarantee a steady stream of income each month.Most people choose to freelance as a sole trader. One of the biggest advantages to sole trading is the lack of red tape. Typically, this structure means less paperwork and more privacy than limited companies (although you’ll still need to complete an annual tax return).Regardless of business structure, you must register with HMRC by the deadline of 5 October after the end of your first tax year. There are other things to consider, such as setting your pricing structure, filling out self-assessment taxes, and sending invoices.Need a good freelance business idea? Check out the top cheap small business ideas for an easy way to earn some extra pocket money this year. Share this post facebook twitter linkedin Tags News and Features Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.