Top contractors pocket three times the average pay
Ongoing claims by workers’ groups that ‘Britain needs a pay rise’ is unlikely to ring true to freelance contractors, the elite of whom now earn three times the average UK wage, up from twice previously.
In a study of contractors in all 650 parliamentary constituencies, the Professional Representation Network (PRN) found that the top 100,000 contractors each take home about £80,000 a year, compared with the average annual income of £27,000.
“These high levels of income are not achieved without tremendous skill and focus”, said PRN, seemingly aware that unions’ ‘fair pay’ campaigns are running nationwide until next week.
“As UK business moves towards higher and more specialised skills, and areas like technology, finance, energy and engineering continue to grow, contractors’ earnings should continue to outpace those of employees.”
As expected, Central London and the City of London emerged as the rate-richest areas for temporary professionals, almost 20,000 of whom in these areas report an average yearly income of about £120,000.
But Edinburgh and Manchester are easing London’s stranglehold on top rates, by respectively paying the average contractor £57,000 a year, albeit only in the South of Scotland’s capital and, in the suburb of Altrincham & Sale West, £38,000 a year.
Sheffield, Belfast and Renfrewshire also emerged in PRN’s Top 50 Rate Paying Constituencies, where self-employed contractors have average earnings per year of £31,800, £30,200 and £30,000 respectively.
Such contractors are typically better off than their peers in Aberdeen – just outside the Top 50 and offering average yearly take-home pay of £28,000 – but are well below those in Edinburgh West, where contractors make an average a year of £42,800.
Kristian Gourlay, director at PRN, is not surprised that the Scottish capital is now “up there” with some of the highest rate paying constituencies, of which 26 in the top 30 are located in London and the South East.
“It is the second largest financial centre in the UK after the City and has the second largest gross value added of any UK region after London,” he said, pointing to Edinburgh.
“With a number of new banks such as Tesco Bank and Virgin Money setting up headquarters alongside long-established financial institutions such as Royal Bank of Scotland and Standard Life already based there, the market for contractors is buoyant.”
However it is nearby Aberdeen that was billed as the Scottish city for contractors to really watch, as the oil and gas industry will, according to Gourlay, “help it climb up the league table in the future.”
Elsewhere, Merseyside, specifically Sefton Central, is currently letting down the North West as a respectable payer to contractors, as it shares bottom ranking in the table with Poplar and Limehouse, for offering self-employed residents less than £23,000 a year.