One of the first steps of becoming a contractor is accepting that it is quite different to being employed full time. There are far more risks.
Self-employed contractors aren’t paid through PAYE, and they don’t have the employment rights of employees.
While employees have the safety of sick pay, contractors are exposed to financial loss the first morning that they are unable to work.
Employment & Support Allowance for a single person over 25 in the 'support group' pays a maximum of £109.30 a week from April 2015.
Contractors do not have any additional security blanket of benefits they may have had from previous employers.
As a result contractors have the ability to earn a higher income, but ultimately the responsibility falls on their shoulders to protect themselves and their family if they are ever unable to work.
Many of our contractor clients we speak to decide to replace prior work benefit’s such as sick pay, via an Income Protection plan. Income Protection is designed to pay you a regular income if you are unable to work due to sickness or accident.
This can help you to maintain your standard of living whenever you should need it with no limit on the number of claims you can make. This allows you to recover naturally without the pressure of being forced back to work due to the need of an income.
Nearly everyone has long term financial commitments and income protection provides long-term protection to cover these.
The amount of monthly income you could receive if you were unable to work is dependent on your taxable income (i.e. via your salary and dividends if you pay yourself via a limited company).
If you are interested in arranging Life Insurance, cover for Serious illness or Income Protection (sick pay for Contractors) and would like some free*, friendly and specialist advice, please call the office on 01489 555080 or you can call Bradley directly on 01489 555394.
Article by: Bradley George, Senior Protection Consultant at Contractor Mortgages Made Easy
Media Contact: Sarah Middleton, Public Relations Manager
Tel: 01489 555 080
*Contractor Mortgages Made Easy charge no fee for advising on and arranging non-investment insurance policies, however we will normally receive a commission payment on the sale from the product provider.