Do the self employed get a pension?

Learn whether self-employed workers get a pension, how to set up a private pension, and how Penfold can help.

Today, 69% of the self employed don't have any pension savings. Even worse, 86% aren't currently contributing to a pension - that means more than 4 million people in the UK aren't preparing for life after work - and that's a problem. In this article, we'll look at the options for pension schemes for the self employed, including the best pension for self employed.

Self employed pension plans

If you're self employed, you have a few different options when it comes to saving for life after work. Just because you aren't eligible for an auto-enrolment pension, doesn't mean pensions aren't an option. In fact, you still get to take advantage of all the benefits that come with a pension. The two types of pension you'll need to know about are:

  • private (or personal) pensions
  • the State pension

Let's start with the State pension.

Do the self employed get the State pension?

If you're self employed you're entitled to the State pension in the same way as anyone else. The new flat-rate State pension was introduced in 2016 and is based entirely on your National Insurance record. For the current tax year (2023/24) the maximum value of the new State pension is £221.20 per week.

To be eligible to claim, you must have at least 10 'qualifying years', which essentially means years you were working or claiming benefits that qualified for National Insurance contributions. To get the full State pension amount you'll need to have 35 qualifying years.

To find out how many qualifying years you've earned and when you'll be able to claim, head to the government's website. You can also get more information on how to increase your qualifying years if they need a boost.

For many, living on a weekly income of £221.20 won't be enough to support a comfortable standard of living in later life. This is why it may be a good idea for you to make other arrangements, such as taking out your own private pension, to fund your retirement.

49% of the UK's self employed have no pension at all.

Private pensions for the self employed

Sadly, there’s no such thing as auto enrolment for the self-employed - but by setting up a private pension, you can still benefit from the incentives that come along with a pension.

Private pensions are a very tax-efficient way to save long-term. The government incentivise people to pay into pensions by adding a 25% tax bonus on top of their contributions. For example, if you contributed £100 the government will add £25.

And, when you decide to retire or reduce your working hours, you’ll also be able to withdraw any savings you’ve built up. There are a number of different ways you’ll be able to claim your pension at retirement and you’ll be able to choose how and when you do this.

Self employed pensions from Penfold

Penfold offers a flexible, faff-free pension that's perfect for the self-employed. Our pension is built to be completely flexible around your needs. Top up, change or pause your payments at any time in just a few taps. Ideal for when your income varies month to month.

We already help thousands of self employed people every day gain full control over their finances. Penfold provides the right support and tools to track down pots, make tax-efficient decisions and take care of tomorrow. So you can get back to enjoying today.

Set up your personal pension with Penfold today in just 5 minutes.

Get started in 5 minutes

1. Get a Penfold account by registering your details online or with our app.

2. Transfer an existing pension, or make a one-off or recurring payment (pause or adjust any time).

Done! Check savings progress, change investment plan and more with our app or online dashboard.

Get started now