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How to get a pension when self employed

Find out what type of pension you can have when self-employed and how to get one.

Being your own boss can have many benefits. But it also means that the responsibility of planning for your retirement lies solely with you. In this article, we'll look at how to set up a pension when you're self employed.

What type of pension can I have if I’m self employed?

If you’re self employed, you have access to two main types of pension:

  • a private (or personal) pension
  • the State pension

While the State pension does provide a small income in later life, it only pays out a maximum of £179.60 each week (£9339.20 a year) - and that's if you're eligible. To qualify for the full State pension, you need to have 35 years of Class 2 National Insurance contributions if you're self-employed. You can claim a smaller payment if you have a minimum of 10 years on your National Insurance record. If you're not sure how much State pension you'll be owed, it's worth checking your State pension forecast on the government's website.

Even with a full State pension, it can be difficult to fund a comfortable retirement. That's why it's a good idea to top up with a private pension of your own.

Private pensions for the self employed

One of the best ways to prepare for life after work is through a private pension. With a private pension (sometimes called a personal pension), you pay into a savings pot yourself over your working life. Then, when you've reached the specified age (usually 55, rising to 57 in 2028) you can start using your pot to fund your retirement. You can add regular contributions to your pension every month, or make one-off payments when it suits you. Your pension provider will claim tax relief for you and add it to your pot automatically. There are a few different kinds of private pensions but ultimately, they all have 3 main benefits:

  • it's a tax-efficient way to save for retirement
  • you'll get a tax bonus on your savings from the government
  • you can withdraw your savings at retirement in a number of ways - with 25% completely tax-free

The self employed have access to two types of pension: private pensions and the State pension.

Can I transfer my old workplace pensions?

When setting up a new pension, you may want to start by reviewing your current situation. Do you have any pensions already? Is it possible you have a pension from a previous employer?

If you used to work for a larger employer, you may have been part of an auto-enrolment pension scheme. These are normally defined contribution (DC) or defined benefit (DB) schemes. We explain everything you need in order to find old pensions here. Once you’ve weighed up what pensions you have, you might decide it's simpler and easier to combine your pensions into your new plan. Just make sure you're aware of all the pros and cons of consolidating first.

How to get a pension when self employed

Penfold is the digital pension that's perfect for the self employed. Our pension is built to be completely flexible around your needs. You can top up, change or pause your payments at any time in just a few taps.

We already help thousands of self employed savers every day gain full control over their finances by providing the right support and tools to track down pots, make tax-efficient decisions and ultimately set up a brighter future.

Set up your self employed 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