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Self-employed and Pensions

Self-employed and Pensions: Health

Being self-employed, whether it is as a sole trader, a franchisee, or partner within a partnership, you need to remember that you are your business’ most valuable asset, without you, your business could struggle to continue successfully. Therefore, you should consider investing in your personal health and wellbeing and think about future proofing your financial plans to help safeguard your future success and long term retirement goals.

Being self-employed, have you considered what will happen in the event of you falling ill or having an accident? What would it mean for your ability to continue working in the long term should the worst happen? And how would it impact your ability to save for your retirement?

If you were employed, you would be covered by your employer’s insurance and possibly also been in pension scheme that allows you to retire early due to ill health.

You may already have a plan for retirement and you may be intending to retire from work at a certain age. But, it is important to remember that the nature of life means that things can change unexpectedly and it can mean that you may not be able to work for as long as you think. 

In order to have the income in retirement you need, you should consider maximising any contributions to your personal pension as soon you’re able. If you’re income fluctuates because of the nature of your work, remember personal pensions allow you set how much you contribute, so make sure that this suits your personal circumstances. Similarly, you might want to think about covering any gaps in your National Insurance Record so that your State Pension entitlement is complete.

If you don’t have any pension savings, you should seriously consider starting to save into one. You can find out more about the types of pensions available to you if you’re self-employed and the benefits of pension saving here.

If you would like further guidance for the self-employed and pension planning you can find out more how we can help here

What about insurance?

Income protection

Income protection products are designed to provide the policyholder with a tax-free monthly income if they cannot work/need to take time off from their business due to an unforeseen accident or illness.

If you're contributing to a personal pension scheme, you may be able to protect some or all of your contributions if you should fall ill by taking out a pensions contribution insurance policy. This allows you to continue building your retirement benefits when you can’t work due to illness or accident.

It’s important to get the right income protection policy so you should consider getting advice from a regulated financial adviser.

Life Insurance

Life insurance is recommended for anyone who is self-employed with dependants. Life insurance can pay dependents a lump sum, or regular payments, if you were to die. Death-in-service benefit is part of the salary package for many employed people. As a self-employed person your risks are just the same, so it makes sense to provide for your loved ones with this kind of protection. You can find out more here.

 

Frequently asked...

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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