Pensions for the self-employed

Pensions for the self-employed

If you are self-employed, setting up and contributing to a pension is in your hands. Unlike employees who are automatically enrolled in a workplace pension scheme, setting up a pension will be your responsibility if you are your own boss. The good news is you still receive the same tax relief as you would if you were employed, however you won’t benefit from the extra contributions an employer would make to your pension pot.

Being self-employed often means you are working around the clock to make your business a success, with this busy lifestyle, and without the regular automatic contributions made in employment, it can be hard to keep track of your pension. It’s easy to think of contributing to your pension pot as a problem for another day.

Is it worth having a pension if you are self-employed?

It is essential you set up a pension if you are self-employed if you want to look after your financial future.

There are many pension options for the self-employed and in many cases they can offer you greater flexibility and control compared to your average workplace pension scheme.

Contributing to a pension means you will benefit from 20% tax relief if you are a basic rate tax payer, meaning that for every £100 you contribute the government will give you a tax top up of £20. Higher rate earners can claim even more relief through their self-assessment tax returns each year.

As a self-employed person, you can set up a private pension and make contributions when you have the funds available and still benefit from tax relief. You can use any unused yearly allowance (currently £40,000 annually) from the previous three years, meaning you contribute even more to your pension under carry forward rules. Very useful if you have been saving for a rainy day but not been contributing to your pension.



What are the pension options for the self-employed?

If you are self-employed and looking for a pension, there are three main options available to you:

  • Personal Pensions
  • Self-Invested Personal Pension
  • A Stakeholder Pension

Each vary in fees and rules, but essentially, they all function in a similar way, you can set one up and contribute yourself, making saving for your retirement easier.

Which option is right for me?

What kind of pension you choose as a self-employed person very much depends on your circumstances and goals.  You should research thoroughly to help you make a decision on what pension is right for you.

Here at iSIPP, we believe in choice and flexibility, when it comes to pensions. With iSIPP, you can transfer in any other existing pension into one easy-to-manage account. Plus you will be able to choose where and how your money is invested through one of our fund options.

As a self-employed person, your schedule can be hectic. That is why iSIPP is completely online, giving you 24/7 access to your account so you can manage your money and check the performance of your investments anywhere, anytime.

Contributing to your pension when self-employed

It’s a good idea to set a retirement goal, so you have something to aim for when saving for later life. Check our pension calculator to see how much your pension could be worth with iSIPP.  Remember, as with all investing, your capital is at risk. The value of your portfolio with us can go down as well as up and you may get back less than you invest.

Many self-employed people have been employed at some point in their life. If this is the case, it is likely you have at least one (and perhaps several) pension pots in existence. You should try to track these down as soon as possible and gain an understanding of their value and how much you are being charged each year. With iSIPP you can easily combine pensions into one pot to help you better manage your money and make the most of your savings.


Your pension is one of the most tax-efficient ways you can save for the future and ensure a comfortable lifestyle in your later years. Being self-employed means it is even more important you start considering your pension options as soon as possible, as you do not have the added benefit of an employer automatically enrolling you in a scheme and contributing alongside you. If you would like to find out more about iSIPP and how transferring to us could benefit you, you can learn more about us here.



The content of this article is for general information purposes only and should not be construed as legal, financial or taxation advice. You should not rely on the information contained in this article as legal, financial or taxation advice. The content of this article is based on information currently available to us, and the current laws in force in the UK. The content does not take account of individual circumstances and may not reflect recent changes in the law since the date it was created. It is essential that detailed financial and tax advice should be sought in both jurisdictions and any legal advice, if required.

This notice cannot disclose all the risks associated with the products we make available to you. When making your own investment decisions it is important you understand that all investments can fall as well as rise in value and it is possible you may get back less than what you have paid in. You should also be satisfied that any investments you choose are suitable for you in the light of your circumstances and financial position. You should seek financial advice if you are not sure of what’s best for your situation.


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