New state pension rules give self-employed a weekly boost
8th April 2016 | News
Self-employed professionals are now entitled to up to £155.65 a week compared with a previous maximum entitlement of £119.30 under the previous basic state pension; an increase of £145.40 a month.
Despite the new state pension rules seven-in-ten self-employed professionals are not yet aware of their new entitlement.
Steven Cameron, pensions director, Aegon UK, who carried out the study, said: “For those self-employed individuals who reach state pension age from today, it’s a case of ‘What a difference a day makes’.
“Someone who reached their state pension age – currently 65 for men and 63 for women – on or before 5 April will continue to receive a state pension under the previous regime.
“The self-employed were excluded from the additional earnings related pension so their maximum possible state pension was £119.30.
“But those reaching state pension age on or after 6 April will receive the new state pension which can be up to £155.65 a week – an extra £36.35 a week.
“With many people spending more than 20 years in retirement, some self-employed could gain almost £40,000 more from being eligible for the new state pension.
“While this may come as a very pleasant surprise to the growing number of self-employed who reach state pension age in future, even at the higher level it is unlikely to provide a comfortable lifestyle in retirement.
“Unlike employees, this group are not benefiting from automatic enrolment into a workplace pension, making it even more important to make adequate private pension provision for themselves.”
If you’re already working as a sole trader, at TaxAssist Accountants we can help you keep control of your financial affairs. From self-assessment tax returns and tax savings to business planning and cash flow projection, our accountancy services and tax advice can help self-employed individuals focus firmly on doing what they do best.
To arrange a free initial consultation with your nearest TaxAssist Accountant please don’t hesitate to give our friendly team a call today on 0800 0523 555 or drop us a line using our online enquiry form.