Category: Finance for Contractors

Freelance contractors are putting themselves at risk by placing business before their long-term financial planning, it has been warned.

Financial services firm Standard Life pointed out that self-employed people aged 35 to 44 have pension pots of £24,500, less than a third of the size of their employed counterparts at £73,000.

Freelance contractors and others who are self-employed must be aware of their employment status when planning for their future, pointed out Andrew Tully, senior pensions policy manager for Standard Life.

"While many self-employed people are counting on their business being their pension, when the time comes, there is no guarantee that selling the business will release enough capital to provide sufficient retirement income."

He advised people to set up monthly contributions to a pension that automatically increase year-on-year.

Freelance contractors will receive the basic state pension once they reach retirement age provided they have made the correct national insurance contributions on their earnings.

Posted by John Crawley