North/South divide income gap narrows for contractors
Contractors working outside London can expect to earn on average £109,000 per year, just 6% less than their London-based counterparts who earn on average £117,000 – a far smaller earnings gap than that of permanent employees working in the same regions. ONS figures for permanent employees equates to £27,119. The good news has been revealed by Contractor Financials, which specialises in providing independent financial advice to contractors and freelancers, and sought to mine data from a cross section of 500 contractors who the company has advised in the past year.
Research among its client base also highlighted that those turning to contracting have become younger since the credit crunch with over half of all contractors aged between 30 and 40; today, a 26 year-old contractor is likely to earn £85,341 and can expect to see this increase by nearly 31% to £111,895 by the time they turn 30.
Commenting on the startling gap between permanent and contracting income as well as the earning power of younger contractors, Sat Singh, CEO of Contractor Financials said: “The North South divide is often a topic of hot discussion but our data makes pleasant reading for those contractors working in the North – they are certainly not lagging behind when it comes to their income. And of course, what this means is that they can expect a better quality of life with more disposable income. With lower living costs and house prices, those contractors living in the North can expect to secure a property for 30% less than those in London and the South.
“Today there are some 1.75 million contractors and freelancers working in the UK and this trend is set to continue as workers acknowledge the benefits of working for themselves and are choosing to take the plunge from permanent employment and become freelance and the figures speak for themselves.
“However, this group of workers are still not getting the recognition and help needed from Government when it comes to those benefits enjoyed by permanent employees. Pensions, mortgages and insurance are some of the areas which Government still needs to address if they are committed to supporting this flexible group of workers who are adding real value to UK plc rather than penalising them.”