What does fixed term contract mean in a job advert? (FTC)

Andrew Fennell Andrew Fennell

As if the job hunt wasn’t challenging enough, some job adverts contain cryptic and confusing terminology to make matters worse.

One such example is the phrase is ‘fixed-term contract’ also abbreviated to FTC.

Given that an estimated 1.3 million people in the UK are on fixed-term contracts, this is clearly a popular way of working – but what does it actually mean?

In this guide, we’re going to cut through the jargon and take a look at what fixed-term contracts are, your rights as an employee and the advantages and disadvantages of signing up for this type of contract.


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What is a fixed-term contract?

A fixed-term contract is a contractual agreement between an employer and employee that ends on a set date, or upon completion of a defined project. Put simply, it is a work contract that has a defined end date.

The terms of these contracts can vary from company to company, but in most cases, fixed-term contract workers are paid a monthly salary and will receive the same benefits as full-time employees.

Being on a FTC essentially comes with all the same benefits of a permanent job, except it is only intended to last for a temporary time period.

Some recognisable examples of fixed-term contracts include seasonal workers or maternity leave cover.

It’s also worth noting that you would not be considered a fixed-term worker if you are a student or trainee, you’re doing an apprenticeship, or you work for an agency rather than the company itself.




How long can you be kept on a fixed-term contract?

Fixed-term contracts typically last anywhere between 3-12 months, but they can be extended at any point during your employment. These can also be extended multiple times by the employer.

The notice period for a fixed-term contract can also vary depending on the employer, though these typically align with the company’s permanent employment terms.


What are the benefits of a fixed-term contract?

There are several key benefits of choosing a fixed-term contract for both employers and employees. When looking at a job description, there are several reasons that you should consider choosing a fixed-term contract, and these include:

  • Flexibility – You are not tied in to the employer permanently, whilst also getting job certainty for the period of the contract
  • Gaining experience – These roles can also be a great way to get experience and build on your CV
  • Option to go permanent – Although it might start as a fixed-term role, it could become permanent at a later date if you’re happy in the job
  • Variety – You have the opportunity to work on some really interesting projects – and possibly on lots of different ones
  • High pay – These offer good earning potential; some fixed-term roles offer a higher salary than a typical permanent role
  • Focus – You can focus on the work you’re good at without having to commit to the company or move up to a more senior position if you don’t want to
  • Legal protection – Despite the contract being fixed-term, you are still protected by employment laws and unfair dismissal. This means you cannot be subject to unfair treatment just because your role is not a permanent one


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Can fixed-term contracts become permanent?

As we mentioned above, fixed-term contracts can be extended, but they can also be made permanent at any point during the 3-12 month contract. Plus, if you’re already employed in a fixed-term role, you are more likely to be considered for a permanent position if one becomes available.

Not only this, but if you are an employee who has been kept on successive fixed-term contracts for up to four years, you automatically become a permanent worker after the fourth year. That is unless the employer can demonstrate a valid reason why your contract should remain fixed-term.


“Fixed term contracts offer the stability of a permanent job with the flexibility of a contract”


Can you get a mortgage on a fixed-term contract?

One of the main concerns for professionals considering fixed-term roles is how this will impact other parts of their life such as their credit rating and ability to get a mortgage. After all, mortgage lenders typically only approve those with a stable and guaranteed income.

But you’ll be pleased to know that even if you are on a fixed-term contract, you can still be accepted for a mortgage. There are both specialised and mainstream lenders out there that offer mortgages specifically to those on temporary or fixed-term contracts.

That being said, as income is not guaranteed after a certain period of time (that is, when your contract ends), eligibility criteria for a mortgage may be stricter for fixed-term workers.

Some of these criteria might include how long you have been employed in your current industry and whether or not you’ve had any prolonged periods of unemployment. If you’ve been pretty consistently employed, even on multiple fixed-term contracts, you’re likely to have your mortgage application approved.


Should I take a fixed-term contract?

Armed with all of the information above, you should be one step closer to making an informed decision about whether a fixed-term contract is right for you.

However, this is not a decision you want to make lightly, and everyone’s circumstances are different, so we thought we’d pull together a few final advantages and disadvantages of fixed-term contracts. This will help you to determine whether a fixed-term contract is the right career move for you and your lifestyle.

Some of the advantages of a fixed-term contract and when this could be right for you include:

  • If you’re hoping to gain some experience for your CV, particularly if you’re just starting out in your career. A fixed-term contract can help you to gain valuable experience
  • If you’re happy to move around jobs, you could actually get paid more for a fixed-term contract, so consider if this is going to be financially beneficial for you
  • If you’re looking for a job to fill some time, for example, if you’re looking for a seasonal role over the summer in between your university studies
  • If you’re new to an industry and you simply want to dip your toe in and see if it’s right for you, taking on a fixed-term contract can be helpful without having to commit to a role long term
  • Some industries and roles tend to favour fixed-term contracts as a general rule, for example, software developers or project managers
  • If you want more flexibility in your career and the ability to work on shorter or longer projects as you see fit, this could be the ideal solution for you. Plus, it gives you the freedom to work (or not work) as and when you want – say, for example, if you wanted to go travelling for three months


As you can see, there are lots of advantages for choosing a fixed-term role, but there are some cases where this might not be the right decision for you, for example:

  • A fixed-term contract is not for you if you aren’t prepared to job hunt more frequently than permanent professionals
  • You should also avoid fixed-term roles if you’re looking for long-term job security and are easily stressed by periods of unemployment
  • Finally, if you take on several fixed-term contracts in a row and then decide you’re looking for something more permanent, this could impact how employers see you. They might be concerned that you’re a job hopper and that you will become bored quickly with a permanent role. This could damage future opportunities for you


So, before you accept (or possibly reject) a fixed-term role, consider the pros and cons outlined above and determine which of these match your current situation. This will help you to make an informed decision and take the next exciting step in your career.