Tips for umbrella contractors on how to mitigate rising costs

The cost-of-living crisis continues to be the biggest thing in the news right now, and with inflation at over ten percent (at the time of writing), there aren’t many people who aren’t feeling the pinch. 

But it can be even more scary for contractors who don’t have the protection of a permanent role. This is why working with a compliant umbrella company can help. 

In this article, we look at what contractors can do to protect themselves against rising costs and explain why compliant umbrella companies can provide much needed support during this difficult time.

How can an umbrella company help me?

Working with an umbrella company means that your employment responsibilities rest with the umbrella, not with your agency or end hirer. This provides the benefits that go with permanent employment, even when you are frequently shifting your roles or working on short term contracts with multiple employers.

A compliant umbrella company will ensure that you are paying the right amount of tax and national insurance contributions, so there are no nasty surprises, and you know exactly what to expect. 

As an umbrella contractor, you will also get your holiday and sick pay entitlement as with permanent employment.

Pensions as an umbrella contractor

Make sure that you are getting your full pension entitlement. As an umbrella contractor, you are eligible for a workplace pension as long as you earn more than £10,000 per year, are not already enrolled in another workplace pension and are aged between 22 and the current State Pension age. You might also be able to pay tax on your gross salary, provided your umbrella has a salary sacrifice scheme in place.

Mortgages as an umbrella contractor

Mortgage rates are rising, along with the Bank of England base rate, and this means that if you are out of your fixed rate period you might want to look at what deals are out there so you can protect yourself against future rises. 

But contractor mortgages are more complicated than mortgages if you are in permanent employment. Therefore, it is important to talk to a specialist mortgage broker who can find the best deals and give you the right advice for your position.

Are you making the most of your benefits package?

Many umbrella companies provide their contractors with added benefits. This might include private healthcare, employee rewards schemes, discounts packages and certain insurances. Many contractors don’t make the most of their benefits packages simply because they aren’t aware of what they are entitled to. Make sure you ask your umbrella company what is included in your umbrella employment so you can maximise your rewards.

Working with an umbrella company can provide contractors with some much-needed certainty during these changing times. But since the market continues to be unregulated, there are still many non-compliant umbrellas out there who run tax avoidance schemes.
The umbrellas attract contractors with low rates but leave contractors with hefty tax bills. A compliant umbrella company will ensure that you are paying the right amount of tax and national insurance, while providing you with advice and support for your situation.


Since 2002, JMK have been compliantly consolidating back-office, accountancy and payroll functions. 

We have evolved to provide a range of expert services; such as Funding, becoming a leading provider to the contracting industry.

We know every agency is different in some shape or form, even if only by a little, but important bit. Combining our knowledge and experience of multiple sectors enables JMK to support you all from recruiters and payroll, through to finance, compliance and management.

With JMK as your trusted partner, even the smallest team can process the largest payroll, regardless of payroll type.

Have a look at the wide range of services our Funding can provide to you and your business, it is far more than just payroll and finance.

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