Should you go contracting?

Higher day rates. More flexibility. No performance reviews. No annual salary discussions. No mandatory training modules.

On the surface, contracting can look like an obvious upgrade from permanent employment. Many Actuaries reach qualification, see contractors charging €800–€1,000+ per day and start wondering whether they're missing out.

The reality is more nuanced. Contracting can be an excellent career move for the right person at the right stage of their career. It can also be far less lucrative than expected if you underestimate the trade-offs. Here's the honest version.

What is Actuarial contracting?

Instead of being a permanent employee, contractors are typically hired for a fixed period to solve a specific problem or provide additional capacity. Common assignments include:

• Pricing projects
• Reserving support
• Capital modelling
• Solvency II work
• IFRS 17 implementation
• Finance transformation
• Systems migrations
• Data projects
• Temporary cover for vacancies

Assignments can last anywhere from a few months to several years. In most cases, companies are paying for specialist expertise rather than long-term potential.

Permanent employees are often hired for what they could become. Contractors are usually hired for what they can do immediately.

The attraction: higher earnings

Let's address the obvious reason first. Money. Typical Actuarial contracting rates currently look something like:

• Newly Qualified: €500 – €700 per day
• Mid-Level Qualified: €700 – €1,000 per day
• Senior Specialist: €1,000 – €1,500+ per day

For someone earning €120,000 in a permanent role, these figures can look extremely attractive. And in many cases, contractors do earn significantly more. But comparing a day rate directly with a salary is one of the biggest mistakes people make.

Day rates are not salaries

A contractor charging €900 per day is not earning €900 every day of the year. Reality includes:

• Holidays
• Sick days
• Public holidays
• Gaps between contracts
• Training days
• Business administration

Permanent employees continue to receive income during most of those periods. Contractors generally do not.

A contractor working 220 billable days annually at €900 per day generates revenue of approximately €198,000. That sounds fantastic. But from that figure they may still need to fund:

• Pension contributions
• Health insurance
• Professional subscriptions
• Accounting fees
• Income protection
• Periods without work

The gap versus permanent employment is still often substantial, but rarely as large as people initially assume.

The pension problem

One of the most overlooked aspects of contracting is pensions. Many Actuarial employers contribute 8%–15%+ of salary towards employee pensions.

For a qualified Actuary earning €150,000, that could easily mean €12,000–€22,500 per year of employer pension contributions. Over a career, that becomes a very significant amount of money.

Contractors need to replace this themselves. Many do. Some don't. The difference becomes very noticeable 20 years later.

The "every day has a price tag" effect

When you're employed, taking annual leave feels free — you still get paid. When you're contracting, every day away from work has a visible financial cost.

A week off can mean €3,500, €5,000 or €7,500+ of forgone revenue depending on your rate. Many contractors are disciplined enough to ignore this. Others find themselves constantly calculating the opportunity cost of holidays.

The flexibility is real. The temptation not to use it is real too.

The benefits you lose

Permanent employees often underestimate how valuable their benefits package is. Common Actuarial benefits include:

• Annual bonus
• Pension contributions
• Paid annual leave
• Paid sick leave
• Health insurance
• Life assurance
• Professional subscriptions
• Study support
• Income protection

As a contractor, you're generally responsible for arranging and funding these yourself. This isn't necessarily a problem — but it is part of the calculation.

Why many contractors use limited companies

One of the major financial attractions of contracting is operating through a limited company. Many contractors choose to:

• Retain profits within the company
• Invest excess cash
• Control the timing of income extraction
• Build corporate assets

This creates flexibility that permanent employees generally don't have. For financially disciplined contractors, this can be a powerful wealth-building tool.

Some contractors deliberately leave substantial funds inside their company structures and invest them for future use rather than withdrawing everything immediately. The long-term compounding effect can be significant. This is one reason why headline salary comparisons often miss part of the picture.

IR35 changed the market

The contracting market today looks very different from ten years ago. Historically, many UK contractors benefited from favourable tax treatment through personal service companies. The introduction and expansion of IR35 rules changed much of that landscape.

Many UK contracts now sit inside IR35 arrangements where tax treatment is much closer to employment income. As a result, some of the historical tax advantages associated with contracting have reduced.

For Actuaries considering UK contract opportunities, understanding whether a contract is inside or outside IR35 remains essential. The headline day rate alone doesn't tell you enough.

Contracting is cyclical

Contractor demand is project-driven. The Actuarial profession has experienced several major waves of contracting demand:

• Solvency II — created huge demand across Life and General Insurance
• IFRS 17 — one of the largest Actuarial contracting markets seen in recent years
• Finance Transformation — data modernisation, reporting changes and systems projects continue to create demand

The challenge is that these waves eventually end. A contractor earning exceptional rates during a major industry-wide project should not assume those conditions will exist forever. Markets change. Budgets tighten. Projects finish. Demand softens. That's part of the risk.

Specialisation matters

The strongest contractors usually become known for something specific. Examples include:

• GI Pricing
• Reserving
• Capital Modelling
• Reinsurance
• IFRS 17
• Solvency II
• Prophet
• Data & Analytics
• Systems Implementation

Companies rarely hire expensive contractors for generic capability. They hire them because they solve problems quickly. The clearer your expertise, the easier it becomes to command premium rates.

Is contracting easier?

Usually not. Many contractors enjoy excellent flexibility. Others work extremely hard. Companies often bring contractors in because something is behind schedule, understaffed or strategically important. That can create significant pressure.

The idea that contracting automatically means working less is largely a myth. The reality depends heavily on the project and employer.

Who should consider contracting?

Contracting tends to work best for Actuaries who:

• Have several years of post-qualification experience
• Possess specialist expertise
• Have built a strong professional network
• Are comfortable with uncertainty
• Are financially organised
• Enjoy independence

It's generally less suitable for those still building core technical skills or seeking structured career development.

Why some contractors return to permanent roles

This happens more often than people think. Common reasons include:

• Greater stability
• Leadership opportunities
• Better benefits
• Less administration
• Family considerations
• Desire for a longer-term home

Returning to permanent employment isn't a failure. For many Actuaries, it's simply a better fit at a particular stage of life.

So, should you go contracting?

The answer depends on what you value. If your priorities are maximising earnings, flexibility, independence and variety of work, then contracting can be extremely attractive.

If your priorities are stability, predictable income, career progression and strong benefits, then permanent employment may remain the better option.

Neither path is objectively better. They're simply different.

Final thoughts

The best contractors are rarely the people chasing the highest day rate. They're usually the people who understand the economics properly. They know that a €1,000 day rate isn't the same as a €1,000 salary equivalent.

They understand pensions, taxes, downtime and risk. They build specialist expertise. They maintain strong networks. And they treat contracting like a business, not a job.

Done well, contracting can accelerate earnings and provide enormous flexibility. Done poorly, it can create more uncertainty than many people expect. Understanding that trade-off is usually the difference between success and disappointment.