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Pensions
for the self-employed

Open a SIPP Transfer a pension

Being your own boss has its perks, you have more independence, more flexibility and it’s more likely you’ll have a higher job satisfaction than those who are employed. But when it comes to building up your pension savings, we know you face a big challenge.

If you work for yourself, it’s even more important to pay into a pension than if you were employed.

There’s no-one to choose a pension scheme for you, and no employer to make payments on your behalf. Saving for retirement falls entirely on your shoulders.

Self Employed hero

Pensions for the Self-employed

Important information - SIPPs are a type of pension for people happy to make their own investment decisions. Investments go down in value as well as up so you could get back less than you invest. You normally can’t access money in a pension until age 55 (57 from 2028). Pension and tax rules can change and tax reliefs and benefits depend on your individual circumstances. This isn’t personal advice. If you’re not sure if a SIPP is right for you, we can put you in touch with one of our advisers.

Being your own boss has its perks, you have more independence, more flexibility and it’s more likely you’ll have a higher job satisfaction than those who are employed. But when it comes to building up your pension savings, we know you face a big challenge.

If you work for yourself, it’s even more important to pay into a pension than if you were employed.

There’s no-one to choose a pension scheme for you, and no employer to make payments on your behalf. Saving for retirement falls entirely on your shoulders.

Only32%of self-employed people are saving into a private or workplace pension

Take care of your future-self

You’ve made a choice in life to be more independent. Adding money to a pension can help make sure that continues, whenever you decide to stop working.

Many self-employed people use a personal pension for their savings. You’ll typically have a few options to choose from. These include a Self-Invested Personal Pension (SIPP), a personal pension and a Stakeholder pension. The tax benefits are the same but in a SIPP you typically have greater choice and control over where you’re invested.

To complement your pension savings you could consider paying into other cash and investment accounts too.

Find out more about SIPPs

Only32%of self-employed people are saving into a private or workplace pension

Tax benfits of paying into a pension

  • Business owners and their employees
    If you’re a limited company owner, you could choose to set up a salary sacrifice arrangement whereby you and your employees can save tax and national insurance by sacrificing part of any salary for a pension contribution.
  • Business owners and company directors
    Unlike salary, pension contributions are exempt from National Insurance of 13.8% and contributions to employees’ pensions can be offset against corporation tax.
  • Sole traders and partnerships
    Contributions to employees’ pensions can be offset against the income tax liability.

Tax is a complex subject so if you're at all unsure you should seek professional advice. Tax benefits depend on individual circumstances and tax rules can change.

How much can I pay into a pension?

UK residents under 75 can usually pay in as much as they earn and get 20% from the government in tax relief. If you pay tax at a higher rate you can claim back up to a further 25% via your tax return. If you’re a Scottish tax payer different benefits apply.

The amount that can be paid into pensions without incurring a tax charge is limited by the annual allowance - which for most people is £40,000.

If you’re a limited company owner, you might choose to make employer contributions to your pension from your company account. These contributions can normally be treated as an allowable business expense. You won’t pay employer or employee National Insurance on the contribution. Employer contributions aren’t limited by earnings, but are still subject to the £40,000 allowance.

Remember once money is paid into a pension, it can’t usually be taken out again until at least 55 (57 from 2028).

What counts as earnings?

When determining how much you earn and so how much you can pay into your pension, if you’re a sole trader, this will be the profit before tax which you declare to HMRC in the current tax year. If you work for your own limited company, this will be any salary you are paid, plus any taxable benefits, before tax. Dividends, investment income, and any income from property you own, don’t generally count as earnings for this purpose.

Join thousands of self-employed people already saving and investing with HL

  • Invest where and how you want to
    Choose from our SIPP investment ideas, or use our investment research and tools to help you with your decisions.
  • 24/7 access through your online account
    Our easy-to-use online platform and app means you can keep track of your investments and income anytime, anywhere.
  • Trusted by over one million clients
    We're a FTSE 100 company that's won more than 100 awards, including Best Online Investment Provider at the Boring Money Consumer Investment Awards.
  • Support on hand when you need it
    Get ongoing support from the experts on our Bristol-based helpdesk.

Register your interest for exclusive offers

With more and more people choosing to be their own boss, we’re looking at ways we can help people who work for themselves. If you’d like to be notified about upcoming offers please register your interest.

Register interest

SIPP charges

The HL SIPP is free to set up and low cost to run. Our yearly charge for holding investments is never more than 0.45%. Some investments will have their own annual charges, so please check these first before you invest.

It’s free to buy and sell funds. Other dealing charges depend on the type of investment and how often you trade.

View SIPP charges

Two simple ways to open a SIPP

Start with a bank payment

Once you’ve read the important information, it takes less than five minutes to get started. Set up monthly payments from as little as £25, or make one-off payments of £100 or more.

When your account is up and running, you can stop, start or pause your pension contributions whenever you like.

Remember, money in a pension isn’t usually accessible until age 55 (57 in 2028).

Open a SIPP

Transfer your old workplace pensions

Unless you’ve always worked for yourself, you might have old pensions dotted around from previous employers.

Juggling pensions can be time consuming and can get in the way of managing your business. To make life easier, you could think about combining them into one online account like the HL SIPP. Before you transfer, just make sure you won’t lose any valuable benefits or guarantees.

More on combining pensions

Self-employed FAQs

Need help getting started?

Download our essential guide on self-employed pensions and 6 smart ways to save for your future.

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