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Umbrella contractor rates fall

Umbrella contractor rates fall

-Gender gap continues to widen-

The average hourly rate for professional umbrella contractors has fallen in the last 12 months according to the latest research from the Parasol Group of companies.

The average hourly rate for umbrella contractors and freelancers in the UK in February 2012 is &pound32.39 compared to &pound33.12 in February 2011. This is the second year in a row that average rates have fallen and the drop over the last 12 months equates to &pound1,287 in gross pay.

According to the Parasol Group, which includes ClearSky Accounting and Silverline, the gender gap between male and female contractors also continues to grow. In 2011 the gap was &pound3,225 a year. In 2012 this has increased to &pound4,459 based on an average hourly rate for men of &pound33.09 compared to &pound30.56 for women.

The figures are the latest to be released by the Parasol Group as part of its bi-annual Insight Index. Parasol analyses its base of over 8,000 professional umbrella contractors and freelancers in order to take the temperature of the market.

The study also found that experience counts for everything in the contracting and freelancing market as older contractors tend to achieve the higher rates. Parasol found that contractors in the 16-24 age group achieved an average rate of &pound14.58, whereas contractors in the 25-34 category achieved &pound28.34, and in the 35-44 age group &pound36.34.

Commenting on the findings, Derek Kelly, Group Managing Director, said: “Put very simply, contractor and freelancer rates are at the mercy of the current economic conditions and the usual suspects of the global downturn and uncertainty in the Euro zone, is having an impact. We’ve seen a number of high profile news stories in sectors such as banking and finance that have slashed rates for contractors as part of various cost cutting initiatives and this is the end result.

“Having said that, the average hourly rate does equate to a gross salary of &pound57,087 a year which is well above the national median income which the Office of National Statistics puts at &pound26,244.

“Once the UK economy starts to pick up then rates for contractors and freelancers will do so as well. Until then though I would encourage all umbrella contractors to make sure they are maximising their take home pay by claiming for all their legitimate business expenses and start to practice their pitch for a rate increase later on in the year.”

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