Pensions for contractors

masamoah

I am contracting and am set up as a Limited Company. Therefore, I have to sort out my own pension.
I was thinking, is it advisable to just put some money into a secure bond during my contract? This would be money that I would not touch until retirement age. It would be like a US government bond; it would not return much but it will be just something for retirement. I am 27 but still want to make sure I have money for when I retire.

Linton

Suggest you investigate setting up a company pension investing in funds which hold a globally broad range of equities. After inflation you are likely to find bond yields extremely low, perhaps negative.

dunstonh

Therefore, I have to sort out my own pension.

If you are a single director with no employees then you are not required to set up an auto enrolment scheme.

I was thinking, is it advisable to just put some money into a secure bond during my contract?

What is a secure bond and how would that be suitable for retirement provision? If you mean fixed term deposit, then these are unsuitable for long term planning. Plus, most FTDs have a limited contribution date and not suited to regular contributions.

It would be like a US government bond;

You mean UK Gilts? Gilts are an investment option. Not a product/tax wrapper. Really unsuitable for 40 odd years of investing without proper diversification.

I am 27 but still want to make sure I have money for when I retire.

A limited company paying into the pension is common sense. It reduces your CT and gets money out of the company without the need to pay NI. However, the investments within the pension should be better than what you are looking at.

Pincher

Ask other contractors.

The agency might have some accountants/financial advisers they refer you to.

moneyfoolish

masamoah wrote: »

I am contracting and am set up as a Limited Company. Therefore, I have to sort out my own pension.
I was thinking, is it advisable to just put some money into a secure bond during my contract? This would be money that I would not touch until retirement age. It would be like a US government bond; it would not return much but it will be just something for retirement. I am 27 but still want to make sure I have money for when I retire.

Don't call yourself a contractor! They all call themselves Consultants these days and that gets you more money for doing the same job!!!!

xylophone

You might wish to obtain qualified professional advice on how you can use your limited company to contribute to your pension and reduce the amounts you need to pay in tax and national insurance.

https://www.unbiased.co.uk/