If you are currently working in the banking and financial services industry then you will no doubt be aware that there is an abundance of opportunities available, to move into the contracting arena. Contracting can be appealing to permanent employees for a variety of reasons. Firstly, you would be your own boss and would be able to choose the contracts that most appeal to you. You would also be likely to command much higher rates of pay, than a permanent employee in a similar role. If you are considering a move into contracting within the banking and financial services industry then this handy guide will outline everything you need to know, to help you make the decision about whether working as a contractor is the right choice for you.
Money Talk: Rates of Pay for Financial Contractors
Making the move from working in a permanent position to becoming a contractor can feel overwhelming; there are many different pros and cons to consider to decide whether the contractor lifestyle will suit you. One of the most important factors for most people though is the money; will they be financially better off if they choose to contract? In most cases, the simple answer is yes! Depending on your experience levels, your career background, and any niche knowledge that you have, you could earn anywhere between £250 and £1,000 per day as a banking or financial services contractor.
It is important to remember that contractor rates are higher because you are responsible for paying your own tax and national insurance contributions, as well as adding to your own pension plan and covering your own holiday and sick pay. With the support of an experienced accountant, specialising in tax and finance options for contractors and operating under your own Limited Company, you could take home as much as 85% of your earnings.
The Benefits of Operating as a Limited Company When Contracting
We would advise all contractors that want to retain as much of their money as possible, to operate under a limited company, as it opens up more tax options to you and also enables you to claim a wider range of tax deductible expenses. Many of these tax opportunities are not available to individuals who work on a PAYE basis. The more of your income you can offset, the more you will take home. We specialise in looking at these options and making them work for you. There are other benefits of operating as a limited company, including:
- When you work under your own limited company you retain total control over the direction of your career. You can determine where and when you work and who you work for, without having to consider your responsibility to an agency or umbrella company. This is particularly appealing to individuals looking to improve their work-life balance or enjoy regular holidays.
- Although it might seem like more admin, when you work for your own limited company, you are responsible for billing your clients directly. The benefits of this is that you will have more control over your finances and can talk to the person paying your bill directly, rather than having to deal with a third-party agency.
- When working for yourself can choose your own career path. If you want to climb to the top of your career ladder, then you can put the work in and carve your own route to success. Alternatively, if you want to take a step back to focus on your family life or travel, then you can make your career work around you.