10th July 2009 Career Zone

If you're going to be self-employed - but even if you're going to continue working PAYE, there are several things you ought to think about. For many of them, it would be extremely wise to see an independent financial advisor but here's our potted guide to income, pensions and insurance.

Income protection
By becoming freelance, you throw away your security of income in the event of injury or illness. If you’re incapacitated on a freelance contract, your employer will have to find someone else and, depending on your contract, will probably simply terminate your employment.

Income protection usually gives you a guaranteed monthly income until you are well enough to return to work. You decide how much that monthly amount needs to be, and how soon it will kick in once you are laid up.

And it’s not expensive. Different policies work in different ways, but just as an example, a 30 year old male office worker, who’s a healthy non-smoker, can expect to pay around £25 a month for a policy paying out £1,500 a month after 13 weeks unable to work.

Pension plan
If you’re leaving a company with an occupational pension plan, you will almost certainly need advice on how to bring your pension with you – or how to start a new personal pension plan. If you’re just beginning your TV career, you may not have a pension at all.

The government’s pension service has a special section on their web page for the self-employed, which talks you through all the necessary issues. It’s a good place to start if you know nothing about pensions.

Under-provision for pensions is currently a huge problem in the UK. Amongst people aged 25 or over, 12.1 million are failing to save enough to enjoy a comfortable retirement. This is one area where union membership could pay dividends; BECTU has worked out a deal for a members’ stakeholder pension with one of the UK’s biggest pension providers, and if you’re engaged under the terms of their agreement with PACT, your employer should pay a contribution to this pension.

An independent financial advisor will help you out, both with pensions and income protection. Usually their first consultation is free, and it’s up to you whether you take their advice any further.

Insurance
If you are working on location in contributors’ homes, in your employers’ offices, or in post-production suites surrounded by costly equipment, there’s a chance that accidents or breakages could happen as a direct result of the work you are doing - from someone tripping over your laptop cable, to a window being knocked out by a boom pole. Regardless of the health and safety measures in place, legal action could result.

If you are freelance, your contract may protect your employer against liability for any claims caused by your actions. Having your own public liability insurance will mean you’re covered, if you are sued by a member of the public for accidental damage to property, or bodily injury. It’s not expensive. What’s more, BECTU offers its members public liability cover for £18 a year.

Secondly, you need to make sure that your car is insured for any business use you will be putting it to. The drive to and from your normal place of work may be covered by your current personal policy. Using it for other work purposes, for example driving between locations or out doing recces, may not be. The golden rule is to check with your insurers before you start using your car as a freelancer.

Thirdly, you need to make sure that your equipment is insured for business use. Production freelancers may find that their laptops, or even mobile phones, are not covered either by their employer’s insurance, or by their own home contents policy if they’re away from home. You need to identify the main items of value you need for your work, and make sure you’re covered.

Business bank account
This is not an absolute necessity, but it will make it much easier for you to keep records if you have a separate account which runs the income you get from freelance work. Use it to deposit any invoices, and to pay for any business-related expenses. More on this later in the section on accounts.

Work out your rate
Your earlier market research will hopefully have given you a fair idea of this already. But if you get a call about a job, or are called to an interview, you will need to have a figure you can instantly quote. You may even want to have two figures handy to circumvent the issue of holiday pay.

TV Freelancers have a database of actual going rates at www.tvfreelancers.org.uk, as well as a forum where you can ask other freelancers about the availability of work; and BECTU, the TV union, publishes suggested minimum rates of pay as part of their agreement with PACT, the producers’ association.


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