How to Handle Gaps Between Contracts When Contracting Through an Umbrella Company

Part of working as a contractor through an umbrella company is experiencing the inevitable gaps between contracts. Instead of downtime or risk, these periods can be managed in a way to maintain your employment continuity, protect your rights, and keep your income flow steady.  

In this blog we look closer at why gaps matter, how you can prepare for them, and what you can do. 

• Proactively planning for assignment gaps can help maintain your financial stability and employment record. 

• Understanding your umbrella company’s contract structure to ensure you remain ‘employed’, even during gaps. 

• By using gaps strategically, you may be able to turn them into opportunities, such as upskilling, networking, rest, etc. 

• By proactively communicating with recruiters, agencies and SG Umbrella, you’ll be able to mitigate the length and impact of any contract gaps. 

Gaps between your contracts may seem like downtime, but they can impact more than just your next pay check. 

• Employment continuity – with the correct umbrella set up, as our employees have with SG, you remain employed between contracts and assignments, which supports your rights such as pension auto-enrolment and mortgage applications. 

• Cashflow and income planning – Even with employment continuity, if you’re not actively billing, you may face gaps in your earnings. 

• Market momentum – Having a long break may impact your visibility with recruiters or clients, potentially making it harder to secure your next assignment. 

• Compliance and contract structure – Your contract with SG Umbrella covers employment terms even when you’re experiencing a gap, to avoid any compliance issues.

As with anything, preparation is better than reaction once the event has occurred, therefore it’s better to anticipate assignment gaps and prepare accordingly. 

• Ensure your umbrella contract covers gaps – confirm the employment relationship remains active when you’re between assignments. With SG there’s no need to check – you’re covered. 

• Communicate availability early – ensure you let both your umbrella company and recruiters know of the upcoming end date of your current assignment, and availability window.  

• Build a buffer fund – Ensure you save a portion of your earnings to cover gaps between contracts. 

• Track your future assignment prospects – Keep an eye on job boards, keep in communication with recruiters, and ensure you keep your CV updated. 

Whilst gaps can be considered as lost time, it’s also the perfect time to enhance your contracting career. 

• Upskill or refresh your previously training – use the downtime to complete certifications, refresh your knowledge, or learn new software / tools. 

• Network and market yourself – speak to previous clients, reach out to others on professional platforms, ensure your LinkedIn is up to date, and attend industry events. 

• Rest and recharge – having a break from work can allow you to rest mentally and physically, which can do the world of good and boost performance on your next assignment. 

• Review your contract and finances – use the time to audit your umbrella contract, ensure you’re on the correct payroll scheme, and review your budget. 

Gaps between your assignments do not have to have a negative impact on your contracting career, and with the right structure and proactive forward thinking they can be managed effectively, or even turned into opportunities. Ensure continuity of employment with your umbrella, stay visible in the market, and use gaps strategically to maintain momentum, protect your rights and keep your earning potential strong.  

For any questions regarding contract gaps and how SG Umbrella can help, simply get in touch.