Why the self-employed must be proactive
Employees get auto-enrolment and employer contributions; the self-employed don't. The upside is flexibility and the same generous tax relief — contributions are topped up by tax relief, making pensions one of the most efficient ways to save. The best option depends on how hands-on you want to be.
1. Personal pension
A straightforward, ready-made pension where your money is invested in managed funds. Best for those who want simplicity and a hands-off approach. Low effort, with tax relief on contributions and flexible amounts to suit variable income.
2. Self-invested personal pension (SIPP)
More control and a wider investment choice. Best for confident investors who want to choose their own funds or assets. Lower-cost SIPPs suit DIY investors; full SIPPs suit those wanting maximum flexibility. See our pension consolidation guide if you have old pots.
3. NEST and master trusts
Self-employed people can join NEST (the government-backed scheme) or similar master trusts directly. Best for those wanting a simple, low-cost, well-governed option without choosing a provider themselves.
4. Stakeholder pensions
Capped charges, low minimum contributions and flexibility. Best for those starting small or with irregular income who want a simple, low-cost wrapper.
5. Using a Lifetime ISA alongside
For under-40s, a Lifetime ISA offers a government bonus and can complement a pension. Best as a supplement, not a replacement — pensions usually win on tax relief and (for company directors) employer contributions.
Making the most of it
- Simple and hands-off: personal pension, NEST or stakeholder
- Want investment control: a SIPP
- Company director: employer contributions from the company can be highly tax-efficient
- Variable income: choose a flexible scheme and contribute when you can
How to find the best pension
A qualified pension adviser can recommend the right scheme and contribution strategy for your income and goals. Find a pension adviser through Nesto — free, no obligation.
Frequently asked questions
What pension can the self-employed get?
Personal pensions, SIPPs, stakeholder pensions and NEST are all open to you, with the same tax relief as employees.
Do the self-employed get tax relief on pensions?
Yes — contributions receive tax relief, and company directors can make tax-efficient employer contributions from the business.
What's the difference between a personal pension and a SIPP?
A personal pension offers ready-made funds and simplicity; a SIPP offers more investment choice and control.
How much should I pay in?
As much as you can afford regularly — even with variable income. A common guide is a percentage of profit; an adviser can tailor it.
Is a Lifetime ISA better than a pension?
Usually a complement, not a replacement — pensions typically win on tax relief and employer contributions, but a LISA can help under-40s.