Self-employed sick pay but no retirement funding

Self-employed people would prefer to receive sick pay than any other statutory benefit, a study has found.

FreeAgent and The Freelancer & Contractor Services Association (FCSA) polled 900 micro-business owners and found 76% do not currently offer sick pay and other benefits such as maternity leave, holiday or redundancy pay.

Attitudes towards statutory benefits varied depending on business structure, with sole traders more likely to value sick pay compared to those working through their own limited companies.

Furthermore, 35% of self-employed people have no plans to fund their own retirement.

Julia Kermode, chief executive at the FCSA, said:

“For many people who work for themselves, self-employment is a career choice and those who choose it know this way of working does not come with statutory benefits.

“However, it is clear from our research that many have not made appropriate provisions to cover benefits that employees receive.

“The government should find a way of offering additional benefits, specifically to those people who want and need them.”

Savings for self-employed people

Compared to full-time employees, self-employed people don’t have access to benefits or employer pension contributions to support their savings.

However, there are options available.

You can usually save up to £40,000 per year tax-free into a pension, while you can save up to £20,000 a year into an ISA.

Contact us to discuss your savings strategy.