Working as a Contractor in the UK: Pros and Cons Explained

6 minutes

Working as a Contractor in the UK: Pros and Cons Explained

Thinking about working as a contractor in the UK? Explore the pros and cons of contracting vs permanent employment, from pay and pension contributions to working hours, business expenses, and tax responsibilities.

Why More Professionals Are Choosing Contracting

With 4.2 million self-employed professionals in the UK, more people are exploring flexible work options. If you feel stuck in your current role, contracting could be your ticket to greater freedom and career variety.

However, moving from a permanent role to contract work requires adaptability and resilience. Research shows 53% of contractors worry about finding work, and 50% stress about irregular income.

Here’s a guide to help you weigh the pros and cons of contracting jobs in the UK.

Benefits of Contracting Jobs

Take Control of Your Work Life

Contracting allows you to set your schedule, choose your clients, and pick projects that excite you. Need more downtime? Opt for lighter assignments. Looking for higher earnings? Take on premium projects. You decide how and where you work, whether in the office, on-site, or remotely.

Potential Earnings Increase

Contractors often command higher rates than permanent employees. For example, tech contractors in the US earn an average of $98,079 annually, compared with $93,013 for full-time roles, according to Dice. In the UK, this translates into opportunities for better pay and more frequent bonuses.

Develop Your Skills

Contracting lets you focus on specific skills and grow your expertise. Unlike permanent employment, where training depends on company priorities, contractors can choose projects that enhance marketable skills, making them more attractive to future clients.

Expand Your Professional Network

Contracting exposes you to a variety of clients, recruiters, and industry professionals, helping you grow your network. Deliver great work, and you’ll gain referrals and repeat gigs, expanding your career opportunities.

Avoid Office Politics

Permanent roles can involve office politics. As a contractor, you focus on your work without navigating corporate hierarchies, giving you autonomy and freedom.

Diverse Project Exposure

Contractors can choose projects that align with their interests, keeping job satisfaction high. For instance, IT contractors can pursue innovative analytics projects rather than routine management tasks.

Challenges of Contracting in the UK

Financial Responsibility

Contractors often manage taxes, National Insurance contributions, expenses, and pensions themselves, particularly if working outside IR35. If accounting isn’t your strength, using PAYE via an umbrella company can simplify matters.

Working Solo

Contracting can be lonely, especially if you thrive on team interaction. While you work with different teams, much of the work is independent.

Limited Employee Benefits

Unlike permanent employees, contractors usually don’t receive paid leave, medical coverage, or pensions. Outside IR35, you’ll need your own insurance and pension contributions, although PAYE arrangements through an agency can reduce this burden.

Job Stability

Contracting lacks the security of a permanent role. Proactivity is key: consistently searching for projects and maintaining client relationships helps avoid income gaps. Short notice periods in contract roles mean stability can be unpredictable.

Shaping Your Career Path

Contractors must take charge of their career development, pursuing courses, certifications, and experience independently. Success depends on self-driven growth and the ability to seize opportunities.

Contracting vs Permanent Employment: Which is Best for You?

Ultimately, whether contracting suits you depend on your skills, flexibility, and career goals. At Matchtech, we connect ambitious contractors with projects that matter, helping you build a successful, rewarding career.

"Contracting offers unparalleled flexibility and can be more lucrative. Yet, it isn't for everyone. Understanding your strengths and how they fit into this world is key. Evaluate honestly before making the leap." – Matt Honour, Automotive Recruitment Consultant

Ready to explore opportunities? Browse our latest contracting roles and sign up for free to stay updated with projects that align with your skills.