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Pension scheme for contractors

03.01.13

Self-employed contractors can save themselves thousands of pounds, after Money Mail revealed they can now start contributing into the National Employment Savings Trust (NEST) scheme.

The news will come as a surprise to contractors, as the scheme was originally designed for companies with no scheme in place for their staff. Up until now, self-employed workers have had to contribute to private pension plans, which are much more expensive due to their excessive charges. Using the NEST scheme, a 30-year-old on a salary of £25,000 could increase their pension pot by £26,900 by the age of 65.

One of the few disadvantages of being self-employed is the inability to receive pension contributions from an employer. Some employers pay up to 10% of an employee's salary.

By contributing regularly to a pension, you are creating a nest egg for when you come to retire. Paying into a scheme attracts tax relief, meaning any income tax you paid on contributions (up to £50,000 per year) will be refunded by the Government.

There hasn't been a better time for contractors like you to set up a pension! Click here for more information on the NEST scheme.

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