Saving for your future is important and as a contractor, the responsibility falls to you to ensure you’re saving for retirement. But despite this importance, it seems that many contractors are finding saving money increasingly difficult. A recent survey has uncovered that contractors are largely unprepared for their future with little to no savings or pension.
Most contractors don’t have savings for the future
Contractors are not making savings for their retirement. Research conducted by Drewberry Insurance has revealed that a staggering 73% of self-employed workers do not currently have a personal pension. In addition, a third of self-employed workers didn’t start contributing to their personal pensions until they were at least 36-years old, compared to 11% of full-time employees.
Contractors are twice as likely to have £200 or less to spend each month after meeting basic living expenses. To support this, of all participants surveyed, almost half admitted that when it came to their finances, they were ‘just about managing’. Drewberry suggest that the number one cause of contractors being unable to save money is down to lack of disposable income. This often means that benefits which employees take for granted, such as sick pay and holiday entitlement, are being foregone in the pursuit of extra income.
Are umbrella companies the answer?
For many, an umbrella company provides the best of both worlds: not only can you enjoy the freedoms of contracting, you can also relax in the knowledge that your finances are taken care of for you.
As an employee of Parasol, your employer will make a contribution to your pension fund on your behalf before your wages are paid to you. Parasol’s auto-enrolment scheme means that you can start planning for your future.
Support from Parasol
For further information about the benefits of working under an umbrella or for any questions regarding pensions, Parasol is here to help. Simply call us on 0800 464 0409 to speak to our Best Advice team.
You can read the full report on Drewberry’s website.