Employee to Self-Employed: Things to Consider


Making the leap from employment to self-employment is a hugely exciting time. You may have funding agreed and a business plan ready to go, but have you thought about some of the staff benefits that you are likely to lose from your employed role and how you are going to replace these?

In this video, Ricky Clark from MHA Henderson Loggie Financial Planning takes a lot at some of the common issues and considerations when moving from an employed to a self-employed position.

Covered in this video:

✅ Some common staff benefits that will be lost
✅ A recent client example & how we were able to help them
✅ Some of the products and solutions that can be put into place

📌 If you have any questions, please drop them into the comments section below 👇 or contact Ricky directly at ricky.clark@hlfp.co.uk


What are the most common issues?

As an employee, you are often provided with different forms of remuneration via your staff benefits, such as pension contributions,  life cover, critical illness and income protection, private medical care, car benefits, and childcare vouchers. These benefits are valuable and when transitioning from your employed role to self-employed, unfortunately, these will be lost. However, there are solutions that can be put in place and these should be considered.


Transitioning from an employee to self-employed

We were recently approached by a client who had been considering transitioning from being an employee to owning a limited company herself. After careful consideration of the pros and cons, she decided to take that step. Through our discussions, we were able to identify some of the benefits she enjoyed as an employee that were unfortunately lost. We were able to identify some good solutions for her with her budget that she felt comfortable with in order to plug the gap of the ones that she’d lost.


What solutions were we able to put in place to help the client?

Firstly, we looked at her pension provision, her longer-term objectives, covering things like risk and the amount she wanted to pay in.

Secondly, we looked at income protection. This is really important for individuals changing from an employed role into a limited company role as they are reliant on their income. This plan provided her with a level of cover so that in the event of long-term illness or injury, she could rest assured she would have an income to cover her outgoings on a monthly basis.

Thirdly, we looked at the loss of death and service (life cover), which was an important factor for her and we were able to put in a term plan where it covered her for a set amount, which was payable on death. We also looked at the private medical cover, which was also able to include her husband and provide that security that she was concerned about.

Finally, we were able to identify that there was no mortgage protection in place that she had held with her partner, and therefore we agreed to put in place a plan that covered them both for death or critical illness. We were able to provide her tailored solutions, which protected her current and future financial security.


In conclusion

If you’d like more information, please contact Ricky directly (ricky.clark@hlfp.co.uk) or complete the contact form below.