Four out of five contractors think they will be worse off by the end of the year, according to a new survey.

The survey, from JSA accountants, found that, despite an inflation rate of 3%, 39% of contractors think their outgoings on mortgages, council tax, petrol and utility bills will increase by 15%.

The survey also showed that the credit crunch and the tightening of bank lending, had not adversely affected 80% of respondents.

Barry Roback, chief Executive of JSA, said: “ 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. 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 endusers 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.”