Financial advice for Contractors

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Whether you are a client or not you can benefit from the advice below. Choosing a reliable and truly independent financial advisor needn’t be difficult.

If you’ve just become a contractor / freelancer or even been one for a while, there’s a good chance you will be earning more money than if you were a permanent employee, which after all is only fair bearing in mind the less secure nature of your profession.

Additionally, your finances are probably a little more complex, and whereas a permanent employee, whatever that means these days (I don’t think the term ‘permanent employee’ really exists anymore), you could probably benefit from the services of an Independent Financial Advisor (IFA).

Sitting down with an IFA makes all kinds of sense especially as a contractor or freelancer; they will review your current financial situation and help you to achieve the financial goals you have set yourself, whether that be to retire early, build a tax efficient nest egg or provide additional levels of security for yourself and your family.

Financial advice for contractors includes:

Contractor Pensions – did you know that if you have a limited company your company could be making pensions contributions on your behalf? Having your company pay into a pension can be a highly tax efficient way to make payments. You can invest money directly from the company bank account into your pension. By doing this you avoid paying the income tax you would have paid if the money went into your net salary. In addition you will reduce NI contributions. So for every £100 that is invested in your pension, you pay £46.20 and the taxman contributes up to £53.80.

However, something to watch out for is that not all pension companies can accept pension contributions from a company bank account; however an IFA will be able to guide you through this mine field.

They can also run illustrations to see if you are saving enough towards that golden day when you can sit back, relax and retire on that beautiful Caribbean island. Additionally, they will be able review how well your pension fund manager is performing against their peers. Remember just because a fund manager ‘was’ top quartile last year, it doesn’t mean they are still outperforming the market!

An IFA can also help with Life CoverIncome Replacement and Critical Illness Cover as well as other Investments and Savings Plans.

You may also find the follow guides and pages helpful:

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