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Most IT contractors say their take-home pay will not rise fast enough over the next seven months to account for higher outgoings brought on by the credit crisis. In fact, fewer than one in five say they won’t be worse off by the year-end because they believe their pay will rise each month in line with the higher costs of living. Eighty-four per cent of contractors disagree, saying their monthly pay packets will not be fattened enough to meet their inflated household and consumer bills. As a result, accountancy firm JSA, which commissioned the research, said IT contractors’ spending power appears to be “diminishing by the day.” Its survey of 260 contractors, most of whom were in IT, found that 40% expect their mortgage, council tax; petrol and utility bills to collectively rise by at least 15%. However the consensus was that by the end of the year, a contractor’s monthly bill will actually have risen by 10 per cent. “There is no doubt that the marketing for contractors is still strong, particularly in the IT and medical sectors, but like the rest of the population, they feel that their spending power is diminishing by the day,” said Barry Roback, JSA’s chief executive. In the survey, two-thirds of contractors said their personal finances have already been hit by higher mortgage rates and the tightening of availability of mortgage funds. It found that the scarcity of banks lending following the credit crunch has affected almost one in five contractor jobs, meaning that 80% of contractors remain unaffected at work. Nonetheless, the disparity between real inflation and the state’s figure of 3 per cent might see contractors pushing their agents for more. Mr Roback explained: “With a huge gap between their own experience of inflation and the Government’s official figures, it seems inevitable that there is going to be pressure for end-users and agencies to improve their pay levels to contractors.” In the group’s survey, 85% of contractors accused Labour of failing to create a favourable environment for the self-employed since it came to power in 1997. Mr Roback reflected: “Given the constant changes in legislation relating to the self-employed – very little of it being beneficial – it is hardly surprising that contractors appear to be voting with their feet.” However whether a Conservative government would provide better opportunities is debatable; just under half of the respondents said a contractor’s lot would be better under the Tories. May 27, 2008 Email this article Printer friendly page Previous Page
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