Planning your finances for the year ahead

With the ongoing shift toward private dentistry, alongside significant financial pressures from rising operating costs and challenging economic conditions, it’s more important than ever to review your financial plans regularly.

“The reality is that dentistry isn’t just a clinical profession – it’s also a business. Whether a recent graduate, associate or principal, dentists are navigating complex financial decisions that aren’t necessarily their area of specialism. Sound financial planning is essential to securing your future and this includes ensuring adequate protection is in place,” says Peter Dunn, Head of Intermediary Relationships at Dentists’ Provident.

Whilst some dentists enter a salaried position, many move into general practice and become self-employed, with all the responsibilities that brings.

Let’s face it, financial planning isn’t exactly an exciting subject, especially early on in your dental career, but taking on board some of the following considerations, may help you feel more secure in the future.

Budget wisely

The latest FCA data from 2024 shows that financial resilience remains a concern, with many adults struggling to manage their domestic bills. Understanding where your money is going is the foundation of financial security.

Recent data shows financial pressures are affecting dental professionals across all career stages. The FCA’s Financial Lives Survey 2024 reveals that around 13 million UK adults have low financial resilience. It specified that 7.6 million UK adults have low savings and little capacity to withstand financial shocks with many feeling heavily burdened by bills and credit commitments.

Sensible budgeting can improve your financial resilience. A comprehensive budget helps you understand your spending patterns and take action where necessary. This is particularly important for practice owners managing both personal and business finances. Setting short, medium and long-term goals helps you work towards your larger professional and personal objectives, whether that’s expanding your practice, changing private or NHS contracts, or planning for retirement.

Protect your income

Set up an income protection policy, which will provide a safety net should you be off work through illness or injury. Unexpected loss or reduction in income can wreak havoc with your financial plans if you do not have adequate protection.

“Financial shocks come in many forms. One example is loss of earnings through sickness, and employer sick pay is fading,” states the ‘Building Resilient Households’ report commissioned by the Chartered Insurance Institute. If you did not receive an income, how long would it be before you’d run out of money?

The Government’s Keep Britain Working Review, published in November 2025, reports that over 2.8 million working-age people are now out of work for health reasons – making absence rates at their highest level in 15 years. More than 150 million working days are lost annually in the UK due to sickness absence, but only 6% of adults in the UK had income protection.

If you cannot work because of an illness or injury, your income protection insurance plan helps you maintain your lifestyle without depleting your savings, relying on your family or the welfare state for financial support, by giving you a regular benefit to help replace the income you lose.

As a leading income protection provider to the dental industry, at Dentists’ Provident we know the benefits and reassurance income protection brings. In 2024 Dentists’ Provident paid out £4.9 million in claims to members.

“Often, claims result from something completely unexpected – sporting accidents, car accidents, or everyday incidents outside the practice,” says Paul Roberts, Head of Claims at Dentists’ Provident.

The youngest claimant in 2024 was only 27-years-old, emphasising the importance of taking out income protection while you’re young and healthy, and understanding the long-term benefits it provides.

Dentists’ Provident focuses exclusively on income protection for dental professionals and understands the sometimes-complex earnings structures dentists navigate. This specialist knowledge means financial assessment at the time of claiming is much smoother for members.

“Whether you’re an associate with variable private income or a principal managing practice profits, having a provider who understands these nuances makes a real difference when you need support most. In such a physical career, it’s vital to protect yourself against the unexpected,” adds Peter Dunn, Head of Intermediary Relationships at Dentists’ Provident.

Don’t forget about tax

Stay informed about tax regulations relevant to your profession and your status as a self-employed sole trader or limited company.

Unlike many other professions, there is a steep earnings trajectory in dentists’ earning after qualifying, and it’s easy to see income as available to spend without properly accounting for tax obligations. This challenge affects professionals at all career stages, particularly those transitioning between NHS and private work or taking on practice ownership.

While this may sound simple, often a lack of saving for tax, due to ongoing day-to-day financial pressures can lead to huge financial consequences.

Start saving early for the future

Regardless of where you are in your career, it’s never too early to think about the end of it! There are huge benefits to setting aside funds for your future retirement early.

Investing your income into a qualified retirement plan from an early stage of your career can provide you with the advantage of compound growth for longer. This means that not only does your initial investment generate returns, but the reinvested returns also generate their own returns over time. Starting early maximises this effect, allowing your retirement savings to grow substantially over time.

As an example, if you plan to retire at 65 but delayed contributing to age 35 instead of 30, and assuming your pension fund increases by 5% a year on average, you would have to save an additional 35% each year because you delayed contributing. So, while you may not be able to set aside much to start, even small amounts ensure you don’t lose out on the pension growth and have to save much more later.

What next?

Where can you go from here?

• Take professional advice from a qualified financial adviser, and accountant, to set you on the right track from the beginning
• Ensure that you protect your greatest asset – you! Speak to your financial adviser about income protection insurance
• Don’t forget to ask your advisers how much you should put away for tax each month
• In the earlier part of your career, talk to your senior colleagues in your practice about who they use for professional advice and don’t be afraid to ask them questions
• Regularly review your financial plan, at least annually, as your career progresses and your circumstances change.