date posted: 27-09-2017

Everyone should plan and budget for their retirement. All the advice says that the earlier we start planning the better. 


For individuals in standard, permanent employment a work based pension is an easy and straightforward way to start preparing. For those who are not in traditional employment pension planning is often something which gets put off. 


Umbrella contractors and pensions


Contractors on our umbrella route benefit from the security of being employed along with the various advantages this brings. As such we automatically enrol all of our umbrella contractors on a pension scheme. Our chosen scheme is NEST which is a workplace scheme set up by the government. There is the option to opt out but unless you have alternative provision in place for your retirement then a scheme such as NEST is a good way to ensure you are paying into a pension. 


More information on NEST is available on their website 


For those who are self-employed then it is important to think about and plan for retirement. In the UK more people than ever are operating as self-employed, freelance or setting up their own business. This is great news but the downside is that many self-employed people aren’t planning for or investing in the future. For those who are officially self-employed it is arguably even more important to think about the long-term future and your finances. 


Pensions for the self-employed


If you are self-employed there are a few different options available to you. 


  • > A personal pension
  • > Stakeholder pension
  • > Self-invested personal pension

The NEST scheme is also available to some self-employed individuals, they have a checklist on their site for individuals to use to check if they qualify. 


There are a few things to consider when making decisions about a pension and the right approach for you.


Think about:


  • when you would like to retire
  • what income you think you will need in retirement
  • how much you can afford to contribute to a pension at the moment (review this regularly)
  • what tax relief you could benefit from
  • if you were previously employed and had a work based pension what you should now do with your “old” pension

Some people choose to look at other investments and view them as part of their pension planning such as savings in ISAs, investments in shares or rental property. This can be a great way to spread risk and top up a pension but it is worth remembering that alternative savings and investments won’t offer the tax relief that a pension provides.   


It is always worth seeking advice from an expert. The pensions advisory service offers free and impartial advice on pension matters to the general public. You may also want to speak to a financial advisor who specialises in pensions. Make sure you take advice from someone who is authorised by the Financial Conduct Authority (FCA).   

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