Freelance accountancy rates are squeezed while finance remains an attractive sector for freelancers and temps.
Twice a year I get to crunch all the numbers that come out of all the data we hold on our systems for umbrella contractors. The trends that are uncovered always throw up some useful stats and lead to some interesting conversations around the office.
The findings have shown that 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.
The accountancy sector remains an attractive sector for contractors, temps and freelancers; the average hourly rate remained slightly above average at £33.16. However, this time last year the average hourly rate for accountancy temps working via an umbrella company was £35.36. So freelance accountancy professionals are feeling the squeeze just like everyone else.
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).
In contrast to the rest of the UK’s labour markets, the study suggests that rates do get better with age for freelancers. The average rate in the 25 to 33 year-old category is £28.68, compared to £37.09 for 35 to 44 year-olds and £37.21 for those aged 45 to 54.
You can attribute the drop in rates to the state of the UK economy; however, it’s hard to explain why there’s a gender gap in umbrella contracting. Many industry commentators often put it down (rightly or wrongly) to factors such as women taking a break from their career to have children. I’m not so sure this stands up in the profession and it definitely doesn’t in contracting. Surely a hirer is engaging a contractor because they have a specific skill set and the going rate for that skill set is market led?
The age difference is perhaps more straightforward. The older a contractor, the more experience they have and this is reflected in the rates they can command as they secure more senior roles. So unlike the rest of UK Plcs, age appears to be a benefit for professional accountancy freelancers and contractors.
I firmly believe that freelancers have a massive contribution to make to the UK’s economic recovery. Over the last two months we’ve seen an increase in the number of contractors making enquiries with us, so prospects are picking up.
Rob Crossland is the Chief executive of the Parasol family of companies, which also includes ClearSky Accounting, and provides umbrella PAYE services to over 9,000 freelancers in the UK.