If you have not raised your rates in the past 12 months, you have taken a pay cut. Inflation, increased experience, and growing demand for your skills all justify regular rate increases. The question is not whether to raise rates, but how.
When to Raise Your Rates
- Annually — at minimum, review rates once a year to keep pace with inflation
- After a significant skill upgrade — new certification, major project completed, expanded capabilities
- When you are fully booked — if you have more demand than capacity, your rates are too low
- When starting new client relationships — always apply current rates to new clients
How Much to Increase
- 5-10% — annual inflation adjustment, easy for clients to absorb
- 10-20% — skills upgrade or significant market shift
- 20%+ — only if you are significantly underpriced relative to the market
Small and Regular Beats Large and Rare
A 5% annual increase is much easier for clients to accept than a 25% increase every five years. Consistent, predictable rate increases become expected and normalised.
How to Communicate the Increase
For Existing Clients
Template:
"Hi [Name], I wanted to let you know that I will be updating my rates from [date], reflecting [inflation/expanded capabilities/market alignment]. My new rate will be £X (previously £Y). This applies to new projects from [date] — any work currently in progress will remain at the existing rate. I really value our working relationship and look forward to continuing to deliver great results for you."
Key Principles
- Give notice — 30-60 days minimum, so clients can budget accordingly
- Be brief — state the increase clearly, you do not need to justify extensively
- Honour existing commitments — apply new rates to new projects only
- Do not apologise — rate increases are a normal part of business
- Be prepared to lose some clients — this is healthy; it makes room for clients who value your work at the correct rate
Handling Pushback
If a client pushes back, you have options:
- Reduce scope — "I can offer the same price for a reduced scope of [X instead of Y]"
- Offer a loyalty rate — a smaller increase for long-standing clients (but still an increase)
- Stand firm — "I understand. My rates reflect the current market and the quality of work I deliver. I hope we can continue working together, but I understand if you need to explore other options."
The Clients You Lose Are Usually the Worst Ones
The clients most likely to leave over a 10% rate increase are often the ones who were the most difficult to work with. Clients who value quality over price will stay — and you will have more capacity for them.
New Client Rates
Always apply your current (highest) rates to new clients. Never quote a new client at your old rate because it feels safer. New relationships are the easiest place to set the right expectations from the start.