How to replicate workplace benefits when you're self-employed

There are 4.69 million self-employed workers in the UK, and if you’re one of them – congratulations.

We hope you’re enjoying all the benefits of being your own boss; you can set your own schedule, choose your customers, and work with talented people. But if you want to replicate your workplace benefits in a tax-efficient way, you’ll need to know what you’re entitled to, and where you’ll need to make further provision.

Sick pay

If you’re self-employed, you won’t be entitled to Statutory Sick Pay and will need to set money aside to make up for those days when you’re not able to work. You may also be eligible for Employment and Support Allowance (ESA). There are different types of ESA, and the amount you can claim will depend on how much you earn, how much you continue to work, and the savings you currently have.

You may want to consider Income Protection Insurance (which provides a regular monthly payment as replacement income if you are unable to work due to illness or injury) or Critical Illness Cover which provides a one-off payment after a critical illness, such as cancer, a stroke or a heart attack.

Insurance

Workplace benefits can include life insurance and private medical insurance – and there’s nothing to prevent self-employed individuals from approaching insurers and setting up their own combination of insurance policies. However, self-employed workers should check their current insurance plans. For example, if you work from home, your household insurance may not cover you, and you may need business insurance. Tell your insurer if you’re working from home, and what type of work you do. Otherwise, if you need to make a claim, you may find that your insurance is invalid.

Pensions

As long as you’re making your National Insurance (NI) contributions, you’ll be entitled to the basic State Pension when you retire. But if you’d like a meaningful income when it’s time to retire, you’ll need to choose how you’ll invest – through different types of pensions or other investment products, like ISAs. If you have a workplace pension and would like to continue to contribute, you should talk to the scheme provider, or move your savings elsewhere.

Find out more

If you’re not sure which products (or combination of products) would be best for you, you could benefit from the knowledge and experience of an independent financial adviser (IFA) – who will also help to ensure that the steps you take are tax-efficient and right for you in your unique circumstances.

If you’d like to know how an IFA could help you, please contact us.