Why UK Freelancers need to master payroll and pensions
The UK’s self-employed workforce is booming. Over the last 25 years, more and more people have taken the plunge into freelancing or launching a startup, driven by a desire for flexibility, autonomy, or a necessary change following economic shifts like the recent pandemic.
But with this freedom comes responsibility—especially when it comes to the complex world of payroll and, crucially, long-term financial security.
The Looming £208.5K Pension Shortfall
The stark reality for many self-employed individuals is a significant gap in retirement savings. Recent research from Funding Circle reveals a shocking £208,500 deficit between the average self-employed worker's pension pot and that of a typical employee.
Why the divide?
No Auto-Enrolment: Employees benefit from automatic enrollment into a workplace pension scheme, complete with mandatory employer contributions. Freelancers and sole traders miss out on this free money.
Competing Priorities: For many, the pressure of irregular income, day-to-day cash flow, and affordability means retirement saving often gets pushed down the priority list.
Lack of Knowledge: Navigating personal pensions, SIPPs (Self-Invested Personal Pensions), or other options can be confusing, leading to inaction.
The numbers don't lie: just 20% of the self-employed contribute to a private pension, with the average pot sitting at only £50,700, compared to £318,000 for employees. This leaves the majority facing a retirement income shortfall, even with the State Pension factored in.
How Zyla Accountants Puts You in Control
At Zyla Accountants, we understand the challenges of running a business while also safeguarding your future. We offer tailored support to freelancers and startups, helping you take charge of both your immediate and long-term financial health.
Mastering Your Payroll, Your Way
Whether you're a startup hiring your first team member or a growing freelancer needing to formalise your structure, payroll can be a significant administrative burden, and the penalties for getting it wrong are steep.
We offer two flexible solutions:
Fully Managed Monthly Payroll: Hand it all over to us. We will process your monthly payroll accurately and on time, ensuring compliance with HMRC and dealing with all necessary submissions. You save time and gain complete peace of mind.
Training & Self-Service: Prefer to keep it in-house? We can train you or a member of your team to run your monthly payroll yourself, providing you with the knowledge and confidence to handle all aspects of employee payment and reporting.
Future-Proofing Your Business: Pensions and Auto-Enrolment
If you employ staff, you have legal obligations under Auto-Enrolment. We can provide expert advice and assistance on:
Setting up a pension scheme that meets the statutory requirements.
Understanding and meeting your monthly filing obligations.
And while Auto-Enrolment is a legal requirement for employees, we can also advise you on personal pension options to help close that £208.5K gap for you, the business owner. From SIPPs to Stakeholder pensions, we'll help you find the right vehicle to secure your financial independence.
Your Next Step to a Secure Future
You started your business for freedom, but that freedom shouldn't come at the expense of your retirement. Taking control of your payroll and pension contributions is a non-negotiable step toward securing a stress-free and financially independent future.
Don't overlook the backbone of your business, your long-term financial health.
Ready to ditch the payroll headache and start building a robust retirement plan?
Zyla Accountants is here to help.
Would you like us to schedule a free, no-obligation consultation to discuss your specific payroll and pension needs? Contact us Zyla Accountants today.