As part of their Fresh Criteria, Pepper Money has launched a better deal for the growing population of contract workers, with the introduction of day rate calculations to assess affordability.

Between 2008 and 2017, the number of solo self-employed increased by 34%, according to IPSE, an association of independent professionals and the self-employed. Much of the recent growth has been driven by the expansion of the highly skilled freelance sector, which has grown by 46% since 2008, and now accounts for almost half (46%) of all solo self-employed.

Whether contractors are self-employed, working via a limited company or an umbrella company, Pepper is now able to look at their income based on their daily rate.

In calculating contractor income, Pepper will use either the 12-month average day rate x 5 days per week x 46 weeks, or the current day rate x 5 days per week x 46 weeks, whichever is the lower amount.

For example, a contractor has been earning £350 a day for the last six months but was on a contract for £250 a day for the previous six months, would be assessed on an average day rate of £300.

Contractor mortgages are available across Pepper’s entire range and the lender will accept applicants who can demonstrate a minimum of 12 months history of being a day rate contractor. Their track record does not need to be in the same line of business, but they must be in a contract when making the application.

Rob Barnard, Sales Director at Pepper Money, said: “The employment landscape is changing and an increasing number of people are turning their backs on life as an employee to work on a contract basis, which can give them more freedom and potentially be more lucrative. It can also be uncertain and it is not uncommon for contractors to experience periods of cash flow strain that can make their financial circumstances more interesting.

“Fortunately, at Pepper, we thrive on interesting cases, and with the introduction of day rate calculations, we are able to offer a solution that recognises the current earning potential of your contractor clients even if they have experienced credit problems in the past.”

To find out more, visit www.pepper.money/fresh-criteria