Best Self-Employed Pensions

If you’re self-employed and working in the UK, then you’re part of around 19% of the country’s workforce. While there are many rewards of being self-employed, there are also a lot of details you need to take care of yourself – and that includes choosing the best self-employed pension option for you.

Choosing the right or best pension plan is never easy and as a self-employed worker with only yourself to rely upon, it can seem even more difficult. However, there are options for the self-employed to choose from – and this is where an independent pensions advisor can help.

To help you find the best self-employed pension for your needs, we’ve written this article which covers:


Ready to take the next step? The experts we work with are whole-of-market, meaning that they can find you the best pension plans that are often unavailable to the public.

Call us on 0808 189 0463 or make an enquiry and we’ll match you with an expert for a free, no-obligation chat about your pension options.


We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

What is the best way to save for a pension if you’re self-employed?

As a self-employed worker living in the UK, the best way to save for a pension is to open one with an independent provider and make payments into that scheme. There are many different options available, so it makes sense to do your homework or seek expert advice from a pensions advisor.

If you have an existing pension from a former employer, it’s likely you won’t be able to make further contributions to that pension scheme as a self-employed worker. The provider of that pension might have other pension plans that are suitable for your self-employed status and they will help you select the best one from their suite of products.

If this is an option for you, the provider may be able to consolidate the schemes – your former employer’s pension and your new self-employed pension – together. This will help make it easier to keep track of your savings and understand how much you could save for your retirement.

If the provider of your former employer’s pension can’t help you with a self-employed option or the features and benefits offered aren’t great, then it can help to speak with a pensions expert, like those we work with. They can answer all your questions and help you decide which type of self-employed pension is best for your needs and circumstances.


How much should I save for my self-employed pension?

How much you contribute to your self-employed pension to get the best return for your retirement depends on a number of factors:


  • How much you earn
  • Your living expenses
  • Your age
  • If you have an existing employee pension

A good rule of thumb that is often used is as follows:


  • If you’re in your 30s, try and save around 15% of your annual income into your self-employed pension.
  • For those self-employed workers in their 40s, around 20% should help build a reasonable pension.
  • For those who are in their 50s, they might be advised to save a minimum of 25% of their earnings into their pension plan.

Remember, whether you’re self-employed or work for someone, even if you have the best pension around, the later you begin saving the less money you’ll have for retirement.



Am I entitled to a state pension?

Provided you make enough National Insurance contributions then yes, as a self-employed worker you’re entitled to the state pension. In the 2019/20 financial year, the basic state pension is £168.20 per week. While that’s a welcome contribution towards your income, it’s probably best to try and top that up as it likely won’t be enough to maintain your preferred lifestyle.

If you don’t make any National Insurance (NI) contributions, or not enough NI payments through your tax returns, then you may only be eligible to receive a proportion of that amount.



What pension options are there?

As one of around 4.5 million self-employed workers in the UK, you have four pension options to choose the best one from. They vary and focus on retirement planning specifically rather than using ISAs, which are sometimes recommended as an alternative.

If you’re a self-employed worker in the UK, you can choose from the following pension schemes.


Standard personal pension

This is the most common type of personal pension and is a good option for a self-employed person as it gives you flexibility over how much you invest, how often you pay into it and the type of investments you’re happy with.

Most pension providers will offer this type of pension too, which means you have plenty of choice as to who offers the right pension for you as a self-employed worker. Your chosen provider will also claim back tax relief at the basic rate, on your behalf and then add it to your pension savings.


Stakeholder pension

While there aren’t as many providers of this type of pension, the flexibility – stop and start or cut and increase contributions at any time – remains well-suited to the needs of those not directly employed by a single employer.

The cost of a stakeholder pension can also be a little lower than other personal pensions as management charges are capped at 1.5% for the first 10 years, which can appeal to the self-employed.


Self-Invested Personal Pension (SIPP)

This combines flexibility with more control over exactly where and how your pension savings are invested and can prove the best choice for many self-employed workers.

However, in return for that level of flexibility and control, holders of SIPP pensions will face higher management fees.


National Employment Savings Trust pension (NEST)

First of all, not all self-employed workers are eligible for a NEST pension. If you prefer a pension plan that’s run for the benefit of all the members of the scheme and not for other shareholders, then NEST could be your best option.

To find out if you are eligible for a NEST pension and if it’s the best option for you as a self-employed worker, it can help to speak with a pension broker. They understand all the options available to you and can help you choose the best one for your circumstances.



Which is the best self-employed pension plan?

There is no one-size fits all pension scheme for self-employed workers in the UK. However, there is a best pension for you – you just need to know what income you need to retire on comfortably, what features and benefits you want from your retirement plan, and what contribution amount you can manage.

46% of the UK’s self-employed don’t have a pension. The most important thing is to make sure you’re not part of this statistic.

There are options for self-employed workers looking for a pension scheme that work for them, though don’t worry if you’re not sure where to start – the experts we work with have you covered.

By seeking professional advice from an independent pensions expert, you’ll be able to weigh up your circumstances and preferences to find the most suitable pension deals via their whole-of-market access.



Speak with a pensions expert

To feel confident that you’ve selected the best self-employed pension for you, speak with a pensions expert.

Call us on 0808 189 0463 or make an enquiry and we’ll arrange for you to discuss your options with an advisor we work with.


We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

We can arrange a free pension review for you today

70% of customers who have a pension review find a better deal

Tony has worked in a vastly diverse array of areas in the pensions industry for over 2 decades. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events. Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been "Hope for the best, but PLAN for the worst", and believes that the biggest impact that an adviser can have on a client's life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they WANT their retirement to be.

Book a free, no-obligation pension review today