With around 4.4 million self-employed workers , the UK boasts a thriving environment for startups and independent businesses. But it’s not always easy being self-employed. Lack of support, as well as things like workplace pension can make retirement planning more complex for budding entrepreneurs.

But help is at hand. We’ve prepared an 11-point guide to help you explore the pension options for self-employed people – and the benefits of planning ahead.

To be a take out a NatWest Invest pension, you'll need to be a NatWest customer, aged between 18 and 75, and living in the UK for tax purposes. Pension benefits can only be accessed once you reach the age of 55.

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Personal pensions could boost the retirement finances of self-employed workers beyond the state pension.

They offer benefits like tax relief and different investment options to grow your money over time.

ISAs and savings accounts could also top up your retirement pot and help give you the lifestyle you want after working life.

In this article:

• The importance of retirement planning
• Benefits of a self-employed pension
• Other retirement saving options
• Retirement planning tips
• FAQs

Self-employment has plenty of potential perks. As your own boss, you’ll have greater choice over your working hours and the jobs you pick up. On paper, it gives you more flexibility than a salaried employee.

The downside? You won’t usually have access to a workplace pension. Under the government’s automatic enrolment rules, all eligible employees need to be placed onto one of these schemes . Unless they opt out, workers make regular contributions from their wages, which are usually topped up by their employer. But self-employed people don’t get this safety net.

The state pension should be available to the self-employed if they have enough qualifying years of National Insurance contributions . However, this regular government payment is unlikely to cover all your expenses in later life. That’s where personal pensions and retirement planning come in.

The lack of a workplace scheme shouldn’t stop you from getting a pension if you’re self-employed. Instead, you can sign up for a personal pension directly with a provider. Depending on the scheme, you may have the option to make regular or lump-sum contributions. 

After setting up a personal pension, your money is placed in different investments . The final sum you get at retirement then depends on how much you put in, plus the investment performance.

The benefits of opening a self-employed personal pension can include:

• Tax relief. Many pension providers will automatically apply tax relief of 20% to your contributions .
• Wider choice of providers. Unlike workplace pensions, you’ll be able to compare different providers to find the right scheme for your needs.
• More investment options. You’ll find different types of personal pensions. For example, self-invested personal pensions (SIPPs) allow you to be more hands-on with where your money is invested .
• Flexible contributions. In a workplace scheme, employees generally contribute a set percentage of their salary each month. But a personal pension can be less rigid, with more scope for ad hoc contributions.

Along with regular personal pensions and SIPPs, you may be able to join the government-backed National Employment Savings Trust (Nest). You’ll just need to meet the self-employment criteria .

Personal pensions are the main retirement saving options for self-employed workers. But other products could also help top up your pot:

Cash and Stocks & Shares ISAs

ISAs are tax-free savings and investment accounts . Short for ‘individual savings accounts’, the two main types are:

• Cash ISAs. These work like normal savings accounts. However, the interest you earn is free of tax.
• Stocks & shares ISAs. With these accounts, you can place your money in different investments. You shouldn’t pay tax on any income or capital gains you make. But don’t forget that investments can fluctuate.

Across all your ISAs, you’ll need to stay within an annual allowance. For the 2026/7 tax year, this remains set at £20,000.

Lifetime ISA

This is a specific type of ISA, designed to help people save towards retirement or for their first home.

You can contribute £4,000 every tax year. And the government provides a 25% bonus, up to £1,000 a year.

Traditional savings accounts

Away from ISAs, a range of savings accounts could add to your retirement funds. These include:

• Instant-access accounts, which you can dip into at any point.
• Fixed-term accounts, where your cash is locked away in return for a guaranteed interest rate.
• Regular savers, where you’re asked to make a set payment each month.

Self-employed retirement planning needn’t be complicated. Here are some tips to get you started:

• Work out your retirement income, goals and needs. Think about the lifestyle you want [DS17] in later life – and the amount required to achieve it.
• Understand your income sources. Estimate how much you’ll get from your personal pension, the state pension, savings and investments, plus any workplace schemes you’ve previously been a member of. Don’t forget to include things like rental income too.
• Start saving early. As life expectancies rise, retirement can last for many years. Saving early should give you a better chance of enjoying a comfortable lifestyle.
• Include pension savings in your business budgeting. Consider ringfencing a set amount each month to ensure retirement savings don’t get spent elsewhere.
• Regularly review your pension investments. It’s easy to lose track of fees and how well your pension is performing. Regular check-ins should ensure you’re getting good value and are invested in the right places.
• Consider financial planning advice. A specialist adviser can review your current position and help futureproof your finances.

Learn more about our financial planning services.

Setting a target retirement date can give you something to work towards. It’s also handy when using online pension calculators.

But it’s good to stay flexible – be prepared to move the date if your plans change or your savings aren’t quite where they need to be.

With a self-employed personal pension, you won’t usually be able to access your savings until age 55 or later (though this rises to 57 in 2028). There are three main ways to do this:

1. Cash lump sums. The first 25% is usually tax-free. This could come in handy for a big purchase in early retirement, but you might incur additional tax depending on the amount.
2. Annuities. These turn your pension into a regular, guaranteed retirement income. While it makes your finances a bit more predictable, you won’t own the capital anymore.
3. Pension drawdown. Where you leave your money invested and withdraw it when required. You’ll get some flexibility but might have to keep an eye on the performance of your remaining pot.

As a self-employed worker, you’ll be used to moving between jobs and clients. Retirement doesn’t have to put an end to that. If you’re concerned about gaps in your income, consider partially retiring or gradually transitioning towards it.

Here are some ways to quickly bolster your retirement finances:

• Paying off debts. mortgages, credit cards, and personal loans can help you borrow for different purposes. But they could eat into your budget once retired. Think about paying them off before you leave the world of work.
• Finding old pensions. Many self-employed people work in traditional roles before going it alone. If this was the case for you, it’s worth checking for any workplace pension savings you might have lost track of.
• Working longer. As a self-employed worker, it’s up to you when you retire. If you’re still uncertain about the size of your savings pot, don’t be afraid to delay things.

Retirement finances can differ for everyone. It really depends on factors like your target retirement age, the value of your pension pots and other savings, and any personal goals and lifestyle expectations once you give up work.

Searching for a pension calculator online can give you a rough idea of what to expect.

The potential risks of a self-employed personal pension include:

• Investment fluctuations. Your money is invested, so the value of your pension could rise and fall.
• Locking your money away. In most cases, you won’t be able to access your retirement pot until you’re at least 55[GG(W23] .
• Penalties. Unauthorised, early pension payments could land you with large tax penalties.

With a personal pension, self-employed workers may be able to retire from age 55. Although it’s best to double-check this with your provider.

However, you’ll need to wait until the age of 66 or later if you’re planning to top up your private savings with the state pension.

Self-employment and retirement may feel like a complex combination. Our Premier financial advice service could bring everything into focus, with dedicated support from experienced professionals.

Our team of qualified planners can work with you on building a secure financial future.

• Pension saving is just as important for self-employed people, but the options are slightly different and can sometimes be more flexible.
• Retirement planning isn’t a one-off event. It’s important to regularly review your progress to make sure your retirement finances are on track.
• You can easily adjust retirement targets and goals if your circumstances or needs change, such as delaying retirement or continuing to work part-time.