More than one reason to go contracting
I'm one of your "permie attitude" contractors. I have been contracting in UNIX sysadmin and project work for 10+ years since leaving a (good) permanent role, and during this time have had three 'droughts' where I have been out of contract for more than two months (the worst being a five month gap in 2002 after the reaction to 9-11).
I originally went contracting because a permanent job could not keep my family (admittedly large - 4 kids) in a reasonable standard of life. I entered with debts than needed to be paid off, which I managed, but annoyed the IR leading to a significant fine (it's too easy to get it wrong, even with an accountant) and then hit the 5 month drought. This wiped out all of my savings, and when I grabbed at a contract, it was at a *30%* drop.
Over the next 5 years, I managed to get my rate back to where it had been *WHEN I HAD STARTED CONTRACTING*, to the point where I could start saving again, when I had another gap due to inept management raising a contract (I wanted the contract, I had convinced them they wanted me, but it just took an age getting the paper work raised). Back to square one on the savings.
OK for nearly another two contracts, nearly two years (no rate change), then another gap due to the gathering recession (and more ineptitude regarding raising contracts). I took an 11 percent cut, which is where I am today (fortunately a long-term contract). Even here, and having already taken a cut, I was asked to consider another rate cut, but fortunately it didn't happen because the project was too important to loose any of the contractors.
So here I am again, on a lower rate than 13 years ago (and with a higher tax burden - damn Gordon). How many permanent employee's working in essentially the same job for 13 years, can say that they earn less than they used to! This is because contract rates for even good people have been on a roller-coaster for the last 10 years.
I enjoy my work, I like my current contract, but I am essentially living nearly hand-to-mouth until I can clear the debts again, and start building my savings. And in the meantime, living costs more, travel costs *MUCH* more (important to a contractor who may have to travel to keep working - you don't move for a contract that may only last 6 months).
It's really not as lucrative as some people think. Employers as well as employees NI, full whack of tax (if you are not avoiding IR35), pension, holiday and sick pay to consider, longer traveling time, accommodation costs, accountancy or umbrella company costs . Add to this family disruption, and it is no wonder so many contractors I know either stay single, burn out, or end up in disrupted families (divorce appears to be a higher risk). And to cap it all, I am expected to work a longer week (a 'professional working week' of 40 hours) rather than the 37 or 37.5 that is the norm.
The main advantage for me is that my wife has not had to work, and can stay at home as a 'traditional' housewife, which is what she wanted. But as I keep saying to colleagues, we probably have less household income than a family where both partners have moderately good jobs.