Contractor rates improve with age

The average hourly rate for umbrella contractors has fallen in the last 12 months from £34.41 to £33.12; however contractors over 35 are typically £10 an hour better off than their younger counterparts.

In addition, according to umbrella provider Parasol, the gender gap - the difference in rates between male and female contractors - has increased to £3,225.38 a year.

These figures are the latest released as part of the Parasol Insight Index which analyses Parasol's base of over 16,000 umbrella contractors in order to take the temperature of the market on a bi-annual basis.

The study also found that:

• Greater London and the South East remain the best places to contract in the UK based on hourly rates with both regions seeing slight increases. Rates in Greater London have risen from £36.16 to £36.88 and in the South East from £36.64 to £36.74.
  
• The lowest average rates can be found in the East Midlands (£25.81) followed by Northern Ireland (£27.25) and the North West (£28.64).
  
• The oil industry enjoys the highest average hourly rate at £90 followed by construction (£59.50), finance (£48.37) and healthcare (£45).

Age

In contrast to the rest of the UK's labour markets, the study suggests that rates do get better with age for umbrella contractors. The average rate in the 25 to 33 years old category is £28.68 compared to £37.09 for the 35 to 44 year olds and £37.21 for those aged 45 to 54.

Rob Crossland, Chief executive of Parasol, said: "Contractors, like the majority of workers in the UK, have seen a squeeze on their hourly rate in the last 12 months. When you look at this in addition to the competition that is out there for each contract then the basic laws of supply and demand mean rates have suffered as a result.

"We firmly believe though that contractors have a massive role to play in the UK's economic recovery and in the last two months we've seen an increase in the number of contractors enquiring into our service so prospects are picking up.

"I'd also advise all umbrella contractors to make sure they are claiming for all of the legitimate business expenses they can in order to maximise their take home pay."