If you are a contractor or have recently taken the first steps into contracting or freelancing then you will realize that your finances might be a little more complicated than a permanent employee. You might be receiving income from your own limited company in the form of dividends or you may be working through an umbrella company where your income might change from week to week.
Many high street and local financial advisers are not used to dealing with contractors and might see them as a higher risk for loans and mortgages or they may struggle dealing pensions and investments for workers who have non-standard income streams.
This is where specialist advisers are essential.
What advice do I need?
All of us will require financial advice at some point and many of us will turn to our bank or building society or take advice from an Independent Financial Adviser (IFA). Typically we will be looking for mortgage and savings advice together with life insurance and income protection.
As a contractor, your requirements for financial planning advice will be the same, however certain things will be more important. As you are not likely to be a member of a sick pay scheme, then income protection will be vital. If you were not able to work through accident or sickness then your income would stop immediately (unlike some permanent employees who receive sick pay) and your family and lifestyle will suffer.
Why are contractors’ finances different?
Most permanent employees will have a steady income stream with easy to understand pay slips whereas, a contractor who is working via an umbrella company or through their own limited company, may have periods where they are not earning. Their tax affairs may be more complicated, especially if they are receiving income in the form of dividends. And what’s more, as a contractor, there is every chance they will be a high earner with more income to invest.
An accountant will be able to advise contractors on how to run their business and make sure their tax affairs are in order, but very few are able to give regulated financial advice on pensions, investments and protection policies.
This is why we always recommend speaking to an adviser who understands contractors and can make recommendations that are tailored to their requirements. This is why we decided to partner with Prudential to provide financial planning advice to our contractor clients.
Who are Prudential?
You may already be familiar with the “Man from the Pru” who will have come calling at your home to collect your insurance premiums and give personal financial advice. This way of working stopped quite a few years ago (a shame in some peoples’ opinion) and Prudential Plc has grown into an international financial services business with operations in the UK, Asia and USA.
Prudential now look after the financial needs of over 25 million people and have over £505 billion of assets under management.
We are proud to be associated with Prudential and we feel that working with such a well known, trusted household name in the financial services industry will allow us to provide the best possible service to all of our contractors.
What happens next?
If you would like to speak to an adviser, please get in touch with us and we will make the introduction to a contractor specialist adviser who will look after you.
For more information about Prudential, please visit their website
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