To continue to locum or go permanent?

[user1461609321]

Happy Sunday all!

Really need some advice on what to do as I am so torn at the moment.

Situation as it is, in a specialist role where I have been locuming for around 5yrs, in various different organisations but having been in current role for over 18 months, now thinking about going permanent as have little pension or stability.

Current role, I don't get annual leave, pension, sick days etc, but higher pay which is made weekly, notice periods are 2 weeks on either side

Being permanent would mean 3 month notice period, annual leave, pension etc but lower monthly pay, where I could loose as much as £800 a month which is significant

I am now in a more senior role than when I was historically permanent but like freedom of giving short notice

Thing is, in the 5yrs I have locumed I have cleared all debts, brought flat and decorated it, learned to drive and got a car so quite significant also have paid for extra activities and tuition for kids, and am scared of not progressing as much as will have less finances if permanent

New salary would be just under £60k so not bad at all. And if permanent it may help future mortgage applications as more lenders prefer permanent workers to those on contact

Finally now getting deputy who will be permanent, historically organisations have used this to gradually phase out expensive staff on expensive contracts by offering deputy's step up offers, but if I lock in my role, I keep seniority and won't be easily replaced

P.s primary aged kids, who are somewhat expensive to maintain as we all know

So what would you do?

Stay on higher pay and start a personal pension.

Was thinking of this, though not even sure where to start with this

Bump, anyone else?

I’ve been thinking of moving the other way. I’m permanent staff looking to move to a locum role.

The pension has been a huge reason for staying so far, but I now have enough pension banked to take the risk. I would only have to work 2 days a week as a locum to get the same monthly wage as I currently do full-time, so it’s very tempting!

Amazed with Ir35 this is still worth your while…? I’d definitely look to go permanent.

The pay disparity is still there, imagine being able to cut down hours yet go home with same pay due to change of contract type

A pension is a big thing. Very important. You really need to start on your 20s. You won’t get a state pension til you’re way old nowadays.

So in this job situation, if you lose £800 pcm how much would you gain in pension?

Employers have to match what you pay in (up to a threshold presumably?) so that’s like you paying in £400 to a pension and getting a £400 free top up to £800. Is that possible or would there be a cap on contributions?

So if no cap, you could pay on £400 (and would in a private pension anyway) you’re only losing £400 per cm not £800 and gaining a whacking great pension. So it’s not as big a loss as you thought?

I would stay locum.

Thanks Eliza

@1FootInTheRave

I would stay locum.

Why... may I ask?

Are you married with a working spouse in a permanent role? Yes I know one can’t depend 100 % on spouse for finances but this gives you more of a stable basis, and I would definitely locum for higher pay if I had this. If you are the breadwinner, locum is far riskier.

@AuldFox

Are you married with a working spouse in a permanent role? Yes I know one can’t depend 100 % on spouse for finances but this gives you more of a stable basis, and I would definitely locum for higher pay if I had this. If you are the breadwinner, locum is far riskier.

I am married but currently the only earning person,

You can replace the ‘benefits’ of employment by saving 3 months take home pay, taking out income protection insurance in case you are sick or become disabled and paying into a person pension (you should do this anyway) - that’s why they are paying you the higher amount, they are ‘buying you out’ of the company having to fund that. So the question is, would you prefer being permanently in one place and are there changes in your sector that make employment a better bet than contracting?

*personal pension

@bowlingalleyblues

You can replace the ‘benefits’ of employment by saving 3 months take home pay, taking out income protection insurance in case you are sick or become disabled and paying into a person pension (you should do this anyway) - that’s why they are paying you the higher amount, they are ‘buying you out’ of the company having to fund that. So the question is, would you prefer being permanently in one place and are there changes in your sector that make employment a better bet than contracting?

I know I should diligently save into personal pension etc but probably as most in my position, you just get used to the higher weekly pay and rarely save anything

Another issue is I am beginning to be wary of HMRC and worry about them saying I have not paid enough tax etc, permanent work will take this worry away

@user1461609321

Was thinking of this, though not even sure where to start with this

Opening a personal pension is extremely easy. Just choose a SIPP provider and choose a fund or two. Mine is with Vanguard and they make it easy enough to choose how much risk you want to take. They claim the 20% tax relief back for you but as you're a higher rate tax payer you'll have to claim the higher rate back from HMRC through self assessment.

As you’ve said LP I’m i guess you are medical. Until recently I did a similar role in a different sector. I was a day rate contractor employed through a limited company. You need to do a proper calculation based on the days that you actually work per year of the difference.

By the time you account for sick pay, annual leave, pensions, self-employment expenses like accountants it equipment etc, and compare it you’ll probably find there is not much difference.

I made the move recently from contract to perm, and based on what I charged previously and the days I actually worked I needed to earn 54k as an employee to break even. I walked into a job eating 55 and haven’t regretted it so far!

and with tax changes

Locum not LP.

Also don’t forget to account for professional registrations and memberships in your calculations as most employers cover those and it can be another grand a year when you’ve added them all up.

I did interim work for about twenty yeaars, liked the freedom, the increased day rate more than covered lack of holiday/pension sick pay, always had a steady stream of work and offers when a role was coming to an end - After the first few years I had the confidence to take breaks between assingments .
Downsides were that it could be a lonely place because if you're typically only somewhere for 12 mothsish, and often making changes, always a change in yourself by being there, you never quite know who to trust - at one point had a personal coach and charged it as a business expense.

I took a permanent role a few years ago - primarily because I wanted to work part time, and few part time interim roles came up in my sector - changing now, but usually things needed to be done at 100 mph. I was also concerned about it potentially getting hard to find roles as I got older - but got offered another permanent role on my 60th birthday, so not too much of an issue.

I did try to switch back into permanent role after about 7 years of interim - had a lot of push back with people questioning,why, career choices, chosen breaks in work... but I think attitudes are changing, and it's less of an issue now.

I'm mortgage free, but an interim colleague said recently that he couldn't get a mortgage until he'd secured a 12 month contract.

If you like the freedom and flexibility of interim/locum, stick with it - you're clearly aware od the reasons you get paid more, now that you've cleared debts, use the "extra money" to cover the pension/rainy day fund, take breaks and don't have the mindset of days off & holidays as "this is costing me £xxx" in terms of what you aren't earning. I did that too much at first - did have periods of burn out.

I have been doing locum works for 7 yrs now. I wouldn’t go back to take a permanent role. Life is far less stressful and more flexible.

@RestingPandaFace

Locum not LP.

Also don’t forget to account for professional registrations and memberships in your calculations as most employers cover those and it can be another grand a year when you’ve added them all up.

Very true, hadn't even considered the professional fees

" don't have the mindset of days off & holidays as "this is costing me £xxx" in terms of what you aren't earning. I did that too much at first - did have periods of burn out."

This is so true, though current role gives 2 days toil per month paid, so in effect I am getting 24 days leave a year

Recent tax changes have made interim/ contract /locum roles far less attractive. If things continue the way they’ve gone recently it won’t be long until you are better off as an employee.

I have been trying to weigh up the pros and cons of both