Financial Planning for the Self Employed

Published: 7 March 2019

According to East Midlands Business Link: “The UK’s strong labour market is being driven by the self-employed, the Association of Independent Professionals and the Self-Employed – IPSE – has said.

IPSE welcomed data released today by the Office for National Statistics showing that the number of people in work has risen to another record high of 32.6 million and said a large proportion of this is down to the self-employed.

The data revealed that the number of self-employed people rose by 63,000 to 4.84 million in the last quarter of 2018.” Read the full article here. Here are some of the considerations advisers at Cotswold Independent Financial Services discuss with our self-employed clients, when it comes to their financial planning needs:

Mortgages – the evidence required when securing a mortgage will mean that your options will be different to those in an employed scenario. We can work with you to identify, given your specific circumstances, which provider would best meet your needs. Building up a demonstrable trading record will put you in a stronger position with lenders.

Protection – the right balance must be struck between a suitable level of cover for different situations and the premiums involved. For example, what happens if you can’t work for reasons such as critical illness and how much cover will you require? How much do you have in savings and do you have a mortgage which needs covering during periods that you cannot work?

Pension planning – you are responsible for your own retirement planning and so need a plan in place for the future. Do you already have a pension(s) from previous roles? How much can you afford to put aside into a personal pension whilst self-employed and what are the implications of not being able to access it until you are aged 55+?

Would you prefer a pension that allows you to vary your contribution, which can be a tax effective way of saving, if your work is going well? If you potentially need access to the funds before you are 55 then it may be better for us to research alternative options and present them to you.

If you are self-employed please get in touch for a no fee, no obligation initial discussion, where together we can identify your financial planning priorities.