Your freelance financial safety net
Pensions, insurance and planning for the unexpected
Freelancing can give you flexibility and independence, but it can also mean taking responsibility for some of the financial safety nets that might otherwise come with employment.
You don't need to have everything figured out straight away. This page is designed to help you think about some of the things you may want to put in place, understand the questions worth asking and find trusted places to go for more information.
INFORMATION AND SIGNPOSTING, NOT FINANCIAL ADVICE
FMTW is not a financial adviser, insurance adviser, pension provider or tax adviser. We don't recommend particular financial products, insurance policies, pension providers or investment choices.
This page is here to help you understand some of the things freelancers may want to think about and to signpost you towards trusted sources of information and professional advice.
Everyone's circumstances are different. Before making financial decisions or buying a financial product, make sure you understand what is right for your own circumstances and, where appropriate, seek advice from a suitably qualified professional.
01 Give yourself some breathing room
Freelance income can be unpredictable. A job can fall through, an invoice can arrive later than expected, or illness might mean you can't work for a period.
If your circumstances allow, having some money available for quieter or unexpected periods can give you a little more breathing room. There isn't one amount that's right for every freelancer, and building any kind of financial buffer may not always be possible.
Our irregular-income budget and cash-flow planner → can help you look ahead at your own income and costs and identify periods where things might be tighter.
02 Thinking about a pension when you're freelance
If you're employed, you may be enrolled into a workplace pension and your employer will usually contribute too. When you're self-employed, you won't normally have an employer automatically arranging or contributing to a pension for your freelance income.
That doesn't mean pensions aren't available to you. You can arrange your own pension, but deciding whether to start one, how much to contribute and which type or provider to use will depend on your circumstances.
You may also have pensions from previous employment, or from employed work you do alongside your freelance work.
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Find out what you already have
Before making any new decisions, it can be helpful to understand what is already in place.
Check whether you have pensions from previous or current employers, and make sure the providers have your up-to-date contact details. If you've lost track of an old workplace or personal pension, the government's free Pension Tracing Service may help you find the provider.
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Check your State Pension forecast
Your State Pension is separate from any workplace or personal pensions you may have. What you receive will depend on your National Insurance record and your individual circumstances.
You can use the government's State Pension forecast service to see how much you may be able to receive, when you may be able to receive it and whether you may be able to increase it.
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Explore your options
If you want to consider putting money aside in a pension for yourself, start with impartial information rather than a particular product or provider.
MoneyHelper's guide explains how pensions for self-employed people work, the options you may encounter and some of the questions worth considering. MoneyHelper is a government-backed service offering free and impartial guidance.
Freelance income can change from month to month
Making identical pension contributions every month may not suit every freelancer. Some pension arrangements may offer flexibility over when and how much you contribute, but terms, charges and investment choices vary.
Before choosing or changing a pension, make sure you understand how it works and what it costs. If you need a personal recommendation, speak to a suitably qualified and regulated financial adviser.
03 Check what insurance you might need
Insurance can help protect you against particular risks connected with your freelance work, but the cover you need will depend on what you do, where you work, the equipment you use and any requirements set by the people or organisations engaging you.
A performer, producer, designer, technician and workshop facilitator may all face different risks. Before buying insurance, think about what could go wrong in your particular work, what the financial consequences might be and whether you are already covered elsewhere.
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Protecting other people and their property
Public liability insurance is designed to provide protection if your business activities cause injury to another person or damage to their property.
Whether you need it may depend on the kind of work you do. A venue, client or contractor may also require you to have a particular level of cover before engaging you.
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Protecting your work and professional services
Some freelancers provide professional advice, designs, plans or other services where a mistake or alleged failure could cause a client financial loss.
Professional indemnity insurance is designed for certain claims connected with professional services or advice. Whether it is relevant to you will depend on the nature of your role, your responsibilities and the terms of your contracts.
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Protecting equipment and belongings
Think about the equipment, tools, instruments, technology or other belongings you rely on for your work, and what would happen if they were lost, stolen or damaged.
Equipment cover may be available, but policies can vary in what they protect, where items are covered and whether equipment is insured for its current value or the cost of replacement.
Check what cover you already have
Before buying a separate policy, check whether you already have relevant protection through a union or professional membership, an existing insurance policy or an organisation engaging you for a particular job.
For example, Equity membership currently includes public liability, personal accident and backstage personal property insurance. Eligible Bectu Extra members currently receive public liability and specified personal accident cover, and Bectu also provides information about separate kit insurance for freelance work.
These are examples of membership benefits, not recommendations. Other unions and professional bodies may offer different cover, limits and exclusions.
Membership does not guarantee that every activity, item or circumstance is covered. Check the current policy documents carefully, including who and what is insured, where the cover applies, any exclusions, limits and excesses, and how quickly a claim must be reported.
Equity: Insurance for members →
Bectu: Public liability, personal accident and kit insurance →
IMPORTANT INFORMATION
Do not assume the client or venue covers you
Being booked by a venue, producer or other client does not automatically mean that its insurance will meet claims made against you, cover your own tools or equipment, or replace income you lose after an accident.
An organisation’s policy might cover its own property without covering everything a freelancer brings to the job. Even where some protection is available, limits, exclusions, excesses, security conditions and reporting requirements may apply.
Before relying on someone else’s insurance, ask:
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exactly who and what is insured;
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whether your own or hired equipment is covered on site, in transit or overnight;
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what happens if your work accidentally damages equipment or other property, or causes injury;
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whether an excess would need to be paid; and
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how quickly an accident, loss or possible claim must be reported.
If the answer affects whether you accept the work or bring particular equipment, ask for confirmation in writing.
If your contract requires you to hold a particular type or level of insurance, check that your policy meets that requirement and covers the work you will actually be doing. If you are unsure, ask the insurer, broker or a suitably qualified adviser.
Before choosing insurance
Make sure you understand what a policy covers, what it excludes, any excess you would need to pay and whether its limits meet the requirements of your work or contracts.
MoneyHelper provides impartial introductory information about the different kinds of insurance self-employed people may encounter.
MoneyHelper: Business insurance when you're self-employed →
04 What happens if your income drops or you can’t work?
If illness or injury stops you working, you may lose some or all of your freelance income. Unlike an employee, you won't normally receive Statutory Sick Pay for your self-employed work.
It can be helpful to think about how you would meet your essential costs, what support might already be available and who would need to know if you were unable to complete a job.
Understand what you already have
Start by checking what support or protection may already be available to you. Depending on your circumstances, this could include:
- savings or other money you could access;
- support available through a union or professional membership;
- insurance you already hold;
- sick pay from any employed work you do alongside freelancing; or
- help available through a partner, household or support network.
Check the terms carefully rather than assuming that a particular situation will be covered.
BENEFITS AND SUPPORT WHEN YOUR INCOME DROPS
You do not necessarily have to stop working completely before exploring financial support. Depending on your income, household and circumstances, you may be eligible for Universal Credit or other help while continuing to work.
Universal Credit has specific rules for self-employed people. You may need to report your business income and expenses each month. If you are considered gainfully self-employed, your payment may also be affected by the Minimum Income Floor after any start-up period that applies to you.
These rules are separate from Self Assessment and can affect people with irregular income in unexpected ways. Eligibility depends on your individual circumstances, so use current official guidance or an independent benefits calculator rather than assuming that freelance or self-employed work makes you ineligible.
GOV.UK: Self-employment and Universal Credit
GOV.UK: Independent benefits calculators
In Northern Ireland: Claiming Universal Credit when you are self-employed
Explore whether additional protection is right for you
Some freelancers choose to explore insurance designed to provide financial support if illness or injury prevents them from working.
Personal accident insurance
Personal accident insurance may pay a specified benefit if an accident causes an injury covered by the policy. Cover may be limited to particular activities, injuries, circumstances or locations, and it may not cover illness.
Income protection insurance
Income protection insurance may replace part of your income if illness or injury prevents you from working. Policies vary considerably, including how they define being unable to work, how long you must wait before payments begin and how long payments can continue.
Personal accident and income protection insurance are different products, and one does not automatically replace the other. Check what is covered, whether the policy applies to your particular occupation and activities, any exclusions, and how payments would be calculated.
Insurance will not be right or affordable for everyone. Before buying a policy, make sure you understand its terms and costs and consider seeking advice from a suitably qualified professional.
MoneyHelper: Personal insurance when you’re self-employed →
MAKE A SIMPLE "IF I CAN'T WORK" PLAN
You don't need to predict every possible emergency. A few practical notes can make things easier if you suddenly become unwell or injured.
Think about who would need to know, which jobs or clients might need attention, where important contracts and financial records can be found, and which organisations, insurers or support services you would contact.
If someone you trust might need to help, make sure they know where to find the information they would need, without sharing passwords or sensitive information insecurely.
Where to get further help
Pensions, insurance and financial support can be complicated, and the right choices will depend on your work, income and personal circumstances.
The organisations below provide useful starting points for further information and guidance.
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MoneyHelper
Free, impartial guidance about pensions, insurance, benefits, budgeting and other money matters.
MoneyHelper can explain your options and help you prepare for a conversation with a regulated financial adviser where needed.
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Government financial support
GOV.UK provides current information about benefits and other financial support that may be available if your income falls or you are unable to work.
An independent benefits calculator can help you explore what you may be eligible for based on your circumstances.
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Your union or professional body
If you belong to a union or professional body, check what support is included with your membership.
This could include insurance, hardship support, legal guidance, wellbeing services or advice relating to your particular area of work. Benefits, eligibility and levels of cover will vary, so check the current details directly with your organisation.
WORRIED ABOUT MONEY RIGHT NOW
Freelancing can sometimes mean dealing with sudden drops in income, financial difficulty or unexpected costs. If you need support now, FMTW's wider Financial Support resources bring together arts-specific financial advice, government support and charities that may be able to help.
Explore FMTW's Financial Support resources →
One final reminder
This page is intended to help you identify questions to consider and trusted places to find further information. It isn't personal financial, pension, insurance, tax or legal advice.
Before making an important financial decision or buying a financial product, make sure you understand how it applies to your circumstances and seek appropriately qualified advice where needed.