Freelancer Payment crisis threatens livelihoods
- Younger freelancers aged 18-24 are more likely to leave freelancing
- 55% of freelancer invoices are paid over a month late and the problem is getting worse
- 23.7% or one in four freelancers currently considering their position because of late payments
- Payment problems are more pronounced in the northwest than in the southeast of the UK
New research has uncovered a payment crisis among UK freelancers, which has the potential to generate a talent shortage in the coming months and years.
A quarter of all freelancers surveyed are considering taking on permanent roles due to the difficulty of obtaining payment for their work. In fact, only 16% of the UK-based 500 freelancers surveyed by escrow freelancer payment platform WondaPay said that they never had to chase late payments. Yet 7% said that they routinely have to chase between 86% and 100% of their invoices.
Overall, 55% of freelancers are having to wait a month or more for each of their invoices to be paid. While one in five said that they are used to waiting at least two months for payment, and 6.2% say that they often must wait more than 3 months.
With freelancing being their sole means of income, this is putting an incredible financial – and emotional – strain on the UK’s freelance workforce. And a quarter (24.3%) say that the situation is worsening.
Where you live impacts when you get paid
Interestingly, there seems to be a north-south divide when it comes to the payment of freelancers. Some 22% of those based in the northwest say that up to 100% of their invoices are paid late compared to only 10% in the southeast and 2.1% in the southwest. However, there is very little difference between the invoicing experiences of male and female freelancers.
JJ Rathour, founder and CEO at WondaPay, said without reliable payment, the position of many freelancers simply isn’t sustainable.
“Implementing a system of faster, reliable payment – whether through escrow or other means – for this integral sector of the UK’s workforce could help secure their future. Because no one should have to wait months to be paid for the work that they have done,” said Rathour.
Freelancers matter. Their loss has the potential to carry serious repercussions for the wider business world. It’s of benefit to us all to ensure that freelancers receive the payment they need in order to sustain their businesses. Because at the moment, we’re setting ourselves up for a future talent shortage.JJ Rathour, founder and CEO at WondaPay
Who is WondaPay?
Set up by CEO JJ Rathour, online fraud expert Nick Jowett, and FCA compliance expert Paul Sawyer, WondaPay founded the FCA-regulated deposit holding service with freelancers in mind. Other members of the team hail from Spotify and the cyber-security sector.