Self-employed pension savings is one of the UK pensions system's "most urgent challenges", according to the government.
The latest Pensions Commission interim report from the Department for Work and Pensions (DWP) finds just 17% of the UK's self-employed currently save into a pension, falling to a staggeringly low 4% – one in 25 – for those who earn solely from self-employment.
The report warns that millions are at risk of reaching retirement with insufficient pension savings, blaming (in part) a lack of eligibility for auto-enrolment and a decreasingly supportive system.
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Around 4.4 million people are now self-employed, making up around 13% of the UK workforce. This diverse group of sole traders, people in business partnerships and limited company directors includes freelancers or contractors, consultants and gig economy workers. While these groups can all access the same types of pensions, each may find different options more suitable.
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Do I get a pension if I'm self-employed?
If you're self-employed, you should qualify for the state pension, currently worth a maximum of £241.30 a week (or £12,548 a year) for the 2026/27 tax year.
You'll need 35 full years of National Insurance contributions (NICs) to get the full amount. If you end up contributing less but have at least 10 years' of NICs, you'll get a proportionately smaller pension.
But the state pension alone is not sufficient to achieve a comfortable retirement. You will need extra income on top, whether that's through a private pension, a workplace pension from a former or additional employer or other types of savings.
You may have a workplace pension from a previous job before you started working for yourself. Or it may be that as part of your self-employed work, you are on a zero-hours contract and qualify for a pension under auto-enrolment rules.
However, the reality is that for most self-employed workers, having an active workplace pension – where your employer pays in some money and you also contribute a percentage of your earnings – is unlikely.
There is also no boss or HR team organising a pension scheme for you when you're self-employed; you need to take matters into your own hands. That means choosing a retirement savings vehicle, selecting the investments and deciding how much you want (and can afford) to contribute.
For some, this can feel overwhelming – especially on top of running your own business – so it falls down the 'to-do' list.
Holly Mackay, founder of the consumer site Boring Money, agrees, saying: "Without an employer's guidance, choosing a pension can be a daunting task and people generally don't know where to start."
Why it's vital to save for retirement
You may already be saving for the long term but not via a traditional pension. For example, you may be squirrelling away money in an ISA, or investing in buy-to-let. Or perhaps you're hoping to tap into housing wealth by doing equity release when you're older.
But pensions are uniquely designed for retirement saving, with the added bonus of free cash from the government. It doesn't matter whether you're employed or self-employed, everyone qualifies for pension tax relief.
Basic-rate taxpayers receive a 20% top-up, higher-rate taxpayers get 40% and additional-rate payers get 45%.
Say you earn £60,000 a year. You put £5,000 into a private pension. Because you're a higher-rate taxpayer, you can get 40% tax relief, which means the £5,000 pension contribution costs you just £3,000.
This tax relief makes pensions very valuable. They are more restrictive than say ISAs though, as you won't be able to touch the money until age 55 at the earliest (rising to 57 in 2028). But this could also be seen as a plus point, as it means your pension savings are locked away until retirement, and there is no risk of you withdrawing money for other reasons.
If you don't have much retirement savings, you might be thinking that continuing to work into old age is a solution – and data shows that plenty of over 60s are working part-time or doing freelance work.
But what about if you become ill and have to stop work? And what about your dreams to enjoy retirement, perhaps go on more holidays and spend time with family and friends? Maybe you're hoping to retire early?
You'll need a decent nest egg to ensure you can look after yourself as you get older and to achieve a comfortable retirement.
What are my options?
There are several pension options available to you. These include ready-made personal pensions and self-invested personal pensions (SIPPs).
You can get a personal pension from some of the UK's biggest insurers such as Aviva and Scottish Widows – as well as a range of newer digital players like Wealthify, J.P. Morgan Personal Investing (formerly called Nutmeg) and Moneyfarm. These platforms (just another word for the provider's website or app) typically ask you to complete a short questionnaire and, based on your answers, recommend a ready-made investment portfolio for you. For example, if you want a low-risk portfolio, or if you want to invest ethically.
Investment platforms like AJ Bell, Interactive Investor and Hargreaves Lansdown also offer SIPPs where you can take a 'DIY' approach and build your own pension using investment funds, shares and bonds. Some also offer ready-made portfolios to suit your goals.
You can contribute up to £60,000 each tax year into a pension and receive tax relief. This £60,000 annual allowance is reduced if you're a particularly high earner (if your 'threshold income' is over £200,000 and your 'adjusted income' is over £260,000).
Depending on the pension you choose, you can normally pay in ad hoc lump sums, or set up a regular monthly payment. The former is useful if your income varies wildly throughout the year. The latter is good for a 'set it up and forget about it' approach, so you know you're regularly putting some money away for your golden years.
Best pension providers if you're self-employed
AJ Bell, Hargreaves Lansdown, J.P. Morgan Personal Investing and PensionBee were rated the best providers in Boring Money's 2025 Pension Awards.
Each scored 4.5 stars out of 5 from the research firm, the top rating awarded.
When comparing pension providers, check out the fees and charges, look at the investment range, read reviews from existing customers and if you like to manage your admin on a smartphone, make sure there is a decent app to keep the process simple to manage.
How much should I pay in?
This is a tricky question as there's no right answer, or magic formula. The most important thing is to open a pension and pay some money in. Even if it's a one-off £100 payment, or you set up a regular £50 monthly contribution, it's a start. You’ve got over the first hurdle.
When you've got a bit more free time and the headspace to think about your retirement saving strategy in detail, you can begin to work out how much you can contribute.
Think about the type of retirement lifestyle you want, whether you'll still be paying rent or a mortgage in retirement, and how long you think you might live (for example, if you have any health issues that may affect your life expectancy).
Get a state pension forecast so you know how much you'll likely get from the government when you reach state pension age. Do you have any other income say from buy-to-let, nest eggs like savings accounts or Premium Bonds, or old pension pots lying around?
Try and build up a clear picture of what assets and income you already have, and what your retirement could look like.
Once you’ve done that, there are plenty of online pension calculators to help you work out how much to pay into a pension. You can also try the government’s online midlife MOT to help you plan for the future and improve your financial wellbeing.
If you class yourself as self-employed because you run your own limited company, you can pay employer pension contributions (you are your own employer), which reduces the amount you’ll have to pay in corporation tax. You can pay personal contributions as well, but it’s far more tax-efficient to pay them through the company. You should speak to your accountant or financial adviser if you’re not sure which route is best.
Roger Clarke, Chartered financial planner at The Private Office, said it's also worth noting that if you're a company director paying yourself a small salary and the rest as dividends, you can still pay the maximum £60,000 each year.
"Some people think the maximum contribution is the amount of relevant earnings, which – if you're employed by a large company – is your salary. But if it's your company you can still contribute the £60k maximum – as long as you're personally responsible for the turnover of the company."
