How Much Money Do Engineers Earn in the UK?

Are you considering a career in engineering and wondering about the earning potential in the UK? In this article, we dive into the details of how much money you can earn as an engineer, highlighting the significant difference between income as a contract engineer paid hourly and a permanent employee engineer.

An Engineer

The UK Engineering Salary Landscape

For many professionals entering the field of engineering, the prospect of a stable income is a crucial consideration. As a permanent employee in the UK, the starting salary for an engineer typically hovers around £30,000 . Over the course of two years, with experience and dedication, this figure can increase to £40,000 . However, it's important to note that the salary increase averages around 3% to 5% per year, more often leaning towards the lower end of that spectrum at 3% .

This gradual rise in income means that to reach a substantial sum like £80,000 annually, one would need to remain in the same job for a staggering 20 years . This presents a clear picture of the steady, albeit slower, trajectory of income growth for permanent engineers.

Permenant employees can get around this slow gradual rise much quicker by either negotiating pay increases with your current employer or, if they reject the request, by moving company. Engineers that take a strategic approach to their career can utilise the experiences they have been tactfully gaining to get at least £10k increases in salary upon moving jobs every 2 years. Any offers less than £10k to move jobs and I would question whether it is worth the move in the first place. Where these job moves come with increased responsibility, higher technical levels, moves into management , then salary increases can vary up to the individuals personal circumstances (including network, negotiation skills, the shortage of applicants for a job role, the specific industry, and roles directly managing technical risks with disastrous consequences for the company). In such circumstances, strategic engineers could find themselves moving company with much more than a £10k raise.

However, make no mistake that these increases are not easily accepted and welcomed. You will often be told by seasoned engineers how you should not worry about money and that engineering just is not the career for financial success. Do not listen to them. You are simply talking to the wrong people. I have faced laughter from many Engineers and Recruiters alike and it is extremely disheartening. I assure you though, that you are simply talking to the wrong people that never took a strategic approach to their careers for financial success. Additionally, do not think that everybody deserves more automatically. You have to make a conscious decision everyday to make yourself a more valuable engineer to a business. For a company to pay you a lot more you need to give them a reason that makes sense through their eyes, aligning with the goals, requirements, and limitations, of the business. Sometimes, it is not even about being a better engineer at all, as much as it is being in the right industry at the right time. A really key deciding factor for financial success in engineering is having the versatility to take on projects that are different to what you're used to, that are located in distantly remote places, and the ability for you to take on real risk to yourself. These risks could be moving into contracting as an engineer, or working in dangerous environments.

Engineers often feel that they need to move into management in order to keep increasing their salary. This is largely due to larger companies devaluing the skills of an engineer through large collaborations where every task, part of the design, or requirement is so decomposed that they require less engineering knowledge from the individual and their innovative thinking. The focus is on the collective knowledge in large companies. This leaves many Engineers feeling like they are not actually doing any real engineering work. Alas, Engineers do not have to move into management in order to achieve that Six-figure salary dream. In order to pursue a high value role as a technical specialist you will need to master executing a strategic approach to your learning, development, and thus career.

Contract Engineering: A Different Ball Game

On the other hand, contract engineers in the UK operate under a different payment structure – they are paid hourly. This means that the potential earning capacity can vary significantly based on factors such as project duration, demand for specific skills, and negotiation abilities. Contract engineers often have higher earning potential in the short term due to the flexibility of hourly rates and the potential for taking on multiple projects simultaneously.

These hourly rates for full-time roles can lead to salaries upwards of £100, 000 per year. This is because you are taking on the risk of your own employment. You cannot be a contract engineer straight out of university. You have to provide experiences worth outsourcing that are also difficult to recruit for due to their specialist nature. There are contract roles available for all engineering specialisms across Mechanical, Electrical, and Civil Engineering roles. You could be ready for a contract role as early as 5years into your career, that is when I would start applying for roles, seeing where the demand is, and testing the waters securing interviews.

Due to new laws implemented within the UK, contracting can be done either inside or outside IR35, A piece of legislation that basically decides how you are taxed. Inside IR35 you are taxed just like an employee but your taxes will be done by an umnrella company and not the company you are providing your services to. Outside IR35 your own Private Limited company is taxed, as you will be dealing with your client on a business to business baiss (meaning you will receive the money as revenue, and decide your own income, dividends, and sort out your own taxes with HMRC). See my post on how to get a contract role as an engineer here.

Key Considerations for Engineers

Job Stability vs. Flexibility

Permanent employees enjoy the security of a steady income stream, benefits such as paid time off and healthcare, and opportunities for career progression within a single company. Contract engineers, while having the potential for higher immediate earnings, operate without the safety net of long-term job security and stable benefits.

Skill Development and Networking

Contract engineers often have the opportunity to work on diverse projects and collaborate with various organizations, leading to accelerated skill development and broader professional networks. Permanent employees, on the other hand, may benefit from consistent training programs and a deeper understanding of the company's operations.

Which Path Is Right for You?

When considering whether to pursue a career as a permanent engineer or a contract engineer in the UK, it's essential to weigh your priorities. Are you seeking stability, long-term growth, and benefits, or are you more inclined towards flexibility, higher short-term earnings, and varied experiences?

While the choice between the two paths may seem daunting, it ultimately boils down to personal preferences, career goals, and risk tolerance.

Conclusion

The engineering sector in the UK offers a spectrum of earning potentials, from steady long-term growth for permanent employees to higher immediate income opportunities for contract engineers. Understanding the nuances of each role is crucial for making informed decisions about your career trajectory and financial goals in the engineering field.

Next time you ponder the question, "How much money do engineers earn?" remember that the answer is not just a number but a reflection of the diverse paths and choices available in the dynamic field of engineering.

** Disclaimer: The opinions expressed by the author of this post, on this blog and community are solely his own and do not reflect the views of any past, present, or future employers or any other organisations with which he is associated. The content here is provided for informational purposes only and is not intended as professional advice. **