IT Contractors' living standards being eroded by "credit crunch"

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IT Contractors' living standards being eroded by "credit crunch"

Published on May 28, 2008

A new survey by a specialist accountancy form shows that 80% of professional contractors surveyed believe they will be "considerably" worse off by the end of the year.

The survey, by JSA, shows that 39% of respondents expect their expenditure on mortgage repayments, council tax, petrol and monthly utility bills to increase by at least 15%.

Two thirds maintain that their personal finances have already been adversely affected by increases in mortgage rates and the tightening of the availability of mortgage funds.

Although 80% of contractors polled have not been affected by the "credit crunch" to date, nearly 85% of them accuse Labour of failing to create a favourable environment for the self-employed since its initial election in 1997.

Contractors are more evenly divided as to whether a Conservative government would provide better opportunities and inflation-busting pay levels, with just under 50% of respondents believing that things would be better for contractors under a Conservative Government.

Interestingly, 64% of public sector contractors believe that their pay levels would fall under a Tory Government.

"This survey shows that contractors are being considerably hurt by the escalating cost of living but so far are not too concerned about their job prospects." says Barry Roback, JSA's Chief Executive.

"There is no doubt that the marketing for contractors is still strong, particularly in the IT and medical sectors, but like the rest of the population, they feel that their spending power is diminishing by the day. With a huge gap between their own experience of inflation and the Government's official figures, it seems inevitable that there is going to be pressure for end-users and agencies to improve their pay levels to contractors. Most contractors do not appear to feel that they are going to find work drying up, so they are likely to feel less reticent in demanding more money than permanent employees in more vulnerable sectors."