DFT - Financial planning and Accountancy for new associates

30 Apr 2020
John Drysdale
A 5 minute read
by Jon Drysdale

Financial planning and accountancy – a guide for new associates

Our recent Zoom presentation to the Yorks and Humber DFT groups raised some interesting questions. We summarise these here. Please get in touch if you would like to discuss your individual circumstances. You can contact us by clicking here.

Should I use a dental accountant?

A dental accountant probably isn’t going to charge any more than the typical accountancy fees but will offer so much more. We help clients regularly with a range of advice much of which is specific to dentistry. This includes:

  • NHS pension questions and NHS Compass queries due to errors on your associate payslip
  • Parental leave for dentists
  • What expenses can I claim relating to dentistry?
  • Buying a practice – how to go about this

What income protection policy should I have?

First, we only recommend an income protection policy with a company that offers own occupation cover. This means that is you can’t work as a dentist it will pay out. This is important as most income protection insurers don’t offer this level of cover.

Because we only work with dentists, we can recommend the right policy for you. This doesn’t mean it will be more expensive and an new associate or newly qualified dentist will typically pay around £50 per month for cover.

If you have a policy with Wesleyan or Dentists Provident that you arranged while at University we recommend that this is reviewed. It may not now be suitable for your circumstances.

Do I need a second pension in addition to the NHS pension?

Probably yes – the NHS pension age is state retirement age which is currently 67. So if you don’t want to work to age 67 then you need to start saving for an additional source of income in retirement!

Often a personal pension is the right solution for additional pension saving. This is because the government offers tax relief on your contributions and you can access the savings as and when you need them from age 55. We don’t suggest this is an alternative to the NHS pension but as an addition. There are lots of personal pension options and we can advise on which pension is best for you.

Can I get a mortgage without 2 years self-employed accounts?

In brief - yes. Some mortgage lenders will accept your associate principal agreement in lieu of a accounting history. There are only a few mortgage lenders that offer this so it is worth taking some specialist advice.

Lifetime ISA and increasing repayments to student loans

Payment of debt is always a good plan. However, if you may have other priorities such as building funds for a house deposit. The lifetime ISA (LISA) is a good way to do this as the government add 25% to your own saving. So £4000 becomes £5000 after the bonus. This must be used towards buying (your first) home or later in retirement as an alternative. If you have a Help to buy ISA this can be transferred to the LISA as long as you don’t go over the £4000 annual LISA limit.

Please get in touch with us directly if you would like to discuss your individual circumstances:

For accountancy speak to Sophie Kwiatkowski - 01904 656083 sophie@pfmtownends.co.uk

For financial planning speak to Jon Drysdale - 07882179194 jon.drysdale@pfmdental.co.uk

Or use our contact us form