{"id":1512,"date":"2025-08-21T10:15:15","date_gmt":"2025-08-21T10:15:15","guid":{"rendered":"https:\/\/www.simplybusiness.co.uk\/knowledge\/allowances\/self-employed-pension-guide\/"},"modified":"2025-08-21T10:24:38","modified_gmt":"2025-08-21T10:24:38","slug":"self-employed-pension-guide","status":"publish","type":"knowledge","link":"https:\/\/www.simplybusiness.co.uk\/knowledge\/allowances\/self-employed-pension-guide\/","title":{"rendered":"Self-employed pension guide \u2013 how (and why) to get saving"},"content":{"rendered":"\n

A self-employed pension might seem like a great idea, but with lots on your plate, sorting one out can slide to the bottom of the priority list. But with new figures revealing that over half of the UK\u2019s self-employed workers aren\u2019t on track to cover their basic needs in retirement, now might be a good time to review your pension options. <\/p>\n\n\n\n

Scottish Widows has published its annual Retirement Report<\/a> and highlights the worrying risk of retirement poverty\u2019, with the self-employed, Gen Z, and middle-income earners raising the biggest concerns. <\/p>\n\n\n\n

Despite working hard and building a business by yourself, you\u2019re much less likely to have a pension, if you\u2019re self-employed. The pension and life insurance company\u2019s report into pensions found just 25 per cent of self-employed workers are on track for a minimum retirement lifestyle. <\/p>\n\n\n\n

And while two in five (39 per cent) believe they\u2019re saving enough for retirement, almost a quarter (23 per cent) aren\u2019t saving anything at all. <\/p>\n\n\n\n

If you\u2019re working for an employer, there are all sorts of ways that you can take care of your pension, almost without thinking about it. But as a self-employed worker, what are your pension options? Our complete guide to self-employed pensions covers it all.<\/p>\n\n\n\n

Worrying retirement outlook for self-employed workers<\/h2>\n\n\n\n
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51%<\/strong><\/p>\n<\/div><\/div>\n\n\n\n

At risk of not being able to cover their basic needs in retirement*<\/p>\n<\/div>\n\n\n\n

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25%<\/strong><\/p>\n<\/div><\/div>\n\n\n\n

On track for a minimum retirement lifestyle*<\/p>\n<\/div>\n\n\n\n

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39%<\/strong><\/p>\n<\/div><\/div>\n\n\n\n

Self-employed workers believe they aren’t saving enough<\/strong> for retirement*<\/p>\n<\/div>\n<\/div>\n\n\n\n

*Scottish Widows Retirement Report, May 2025<\/p>\n\n\n\n

Self-employed pension contributions: why start saving?<\/h2>\n\n\n\n

Simply put \u2013 no one else is going to do it for you. It\u2019s true that you\u2019ll be entitled to the state pension, which entitles you to \u00a3230.25 a week, equivalent to \u00a311,973 a year. And this goes down to \u00a3176.45 a week if you\u2019re on the basic pension. Even with a few savings tucked away, is this enough for you to live on?<\/p>\n\n\n\n

For most people, the state pension isn\u2019t going to cover retirement<\/a>. But most people aren\u2019t self-employed, which means that their employer has probably enrolled them into a pension scheme (auto enrolment is now a legal requirement for all UK employers).<\/p>\n\n\n\n

With people living longer, retirement can last for decades \u2013 great if you\u2019re well-prepared with a pension pot to enjoy, but not so great if you only start planning in the few years before you stop working.<\/p>\n\n\n\n

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Free, impartial pension information <\/strong><\/h2>\n\n\n\n

For Pension Awareness Day<\/a>, Money Helper is running a series of live events between 15 and 17 September 2025. <\/p>\n\n\n\n

You can sign up to get free, impartial information about pensions.<\/p>\n<\/div>\n\n\n\n

How to choose a self-employed pension plan<\/h2>\n\n\n\n

The most popular option for a self-employed pension is a \u2018personal pension\u2019. But with lots of options available, take a look at our round-up below and decide what\u2019s right for you.<\/p>\n\n\n\n

Personal pensions<\/h3>\n\n\n\n

A personal pension lets you choose your own provider, and then decide how to invest your contributions from a range of funds. The provider will claim basic-rate tax relief (see ‘Self-employed pension tax relief’ below) on your behalf, which will be added to your savings.<\/p>\n\n\n\n

What you get back depends on what you put in, how your investments perform, and the level of charges you pay. <\/p>\n\n\n\n

You can choose from three types of private pension for self-employed people:<\/p>\n\n\n\n