Taking control of careers, managing work life balance and having the freedom to choose where to work are among the top reasons why people choose to become self-employed. However, half of these individuals said that they would welcome government regulations that would automatically enrol them in a scheme to save for their future.
While it is hard for self-employed individuals to commit to a long-term investment, it is important that they think about doing so, said Ms Montgomery.
“We appreciate that being self-employed may bring periods when you’re out of work or awaiting payment from various contractors, and that can make you reluctant to commit your money to a long-term investment, but it’s essential that you look after your future,” she said.
“Sipps for example are a great way of saving for the future. The government will give you a basic rate of 20 per cent tax free relief on anything paid into your Sipp up to the lower of 100 per cent of your earnings or your annual allowance (£40,000 for most people).
"If you are a higher rate tax payer, you can claim additional tax relief. Putting your business first is one thing but you shouldn’t let your personal financial goals be forgotten along the way, especially when small changes can make a big difference."
LEBC have also called for the reintroduction of carry back of pension contribution for tax relief to the previous year.
“This ended in 2006 but is now needed more than ever to help those with fluctuating profits and income plan for their retirement once they know what funds they have available having completed the previous years accounts and collected or written off debtors,” said Ms Ingram.
“Slow payment of invoices is a major headache for the self employed and helping them plan their affairs after they have got the money in would also be a big help.”