It’s no secret that saving for retirement can be challenging for the self-employed. PensionBee’s Invisible Worker research found that half of the British gig workers surveyed can’t afford to save into a pension. And when it comes to setting up a pension, nearly 30% of them said they wouldn’t know where to start.
Unlike the 20.8 million full-time employees who are paying into workplace pensions, self-employed workers don’t benefit from Auto-Enrolment. This workplace pension law was introduced in 2012 to make it easier for people to save for retirement. It meant that eligible full-time and part-time employees were automatically enrolled into a pension scheme, rather than having to opt in themselves.
Unfortunately, there’s no alternative for the self-employed, leaving many to set up and manage their own private pensions. While it might seem daunting, it can be straightforward to set up a pension and manage your retirement savings. Here’s how to get started today.
Why you need a pension when you’re self-employed
When your freelance business or entrepreneurial venture takes centre stage, saving for retirement can often be sidelined. But without a workplace scheme, it’s even more crucial to take action early. Why? Because relying solely on the State Pension - which is currently around £11,500 (2025/26) - likely won’t be enough to cover your living costs in retirement.
Investing in a self-employed personal pension gives you:
- financial security in later life;
- tax relief on contributions;
- compound growth through long-term investing; and
- flexibility and control over how much you contribute and when.
Step-by-step to setting up a self-employed pension
1. Assess your financial situation
Start by looking at your income, expenses, and how much you can realistically afford to save into a pension each month. Even a small, regular contribution can flourish over time thanks to compound interest. A good rule of thumb is to try and aim for around 10-15% of your income if you can. If your self-employed income fluctuates and that percentage feels difficult to work out, you could try using the 50/30/20 rule on each month’s income. This is where you allocate:
- 50% on current needs such as living expenses like rent/mortgage payments, food, bills and transport;
- 30% on current wants such as eating out, holidays and hobbies; and
- 20% towards future savings and debt repayments such as emergency savings, pension payments and other investments.
2. Choose the right pension type
As a self-employed person, you have a few pension options. All of which are types of defined contribution pension. This means the value when you retire will depend on how much you’ve paid in and how your investments perform. Two common options include:
Personal pension - offered by providers like PensionBee, these are flexible and easy to manage online. You’ll be invested in a pension fund via the provider you choose which is then managed by professional money managers.
Self-Invested Personal Pension (SIPP) - great for those who want more control over their investments. With a SIPP, you’ll choose and manage your own investments yourself.
Both options would mean your contributions benefit from tax relief, if you’re eligible. This is essentially free money from the government. Usually basic rate taxpayers get a 25% top up. This means when you pay £100 into your pension, it’s topped up with £25, bringing the total contribution to £125.
With all defined contribution pensions, the withdrawal age is 55 (rising to 57 from 2028).
3. Research and compare pension providers
There’s lots of providers offering personal pensions. So when looking at your options, consider:
Fees - look for transparent fee structures. Make sure you understand how much you’ll be charged and when. While some providers might charge multiple fees, PensionBee charges one simple annual management fee of between 0.50% and 0.95%. You can see the fee for all of the PensionBee plans on the fees page.
Investment options - some providers offer ready-made plans, while others allow full control via a SIPP. When thinking about the investment options that are ready-made for you, consider your age and stage. Some providers offer higher risk plans which might be more suitable if you’re decades away from retirement. Whereas if you’re approaching retirement, you might want to look for a plan that lowers risk. You can see all of PensionBee’s plans on their dedicated page.
Ease of use - lots of providers now give you the option to access your pension online or via an app. This can make managing your pension easier and more intuitive. With PensionBee, you can see your balance anytime via your online account, known as your BeeHive. Plus there are tools to help you manage your savings like their onboarding checklist, Retirement Planner and fund past performance chart.
Customer service and support - read reviews and see how easy it is to get support when needed. Check the provider’s website to see what tools and resources are available. On the PensionBee website, you can read blogs, watch videos and use tools like their calculators to help you plan for retirement.
4. Open your pension and set it up
Once you’ve selected a provider and pension type, you should be able to set it up online. You’ll typically need:
Your personal details - including contact details, identification documents, your bank details and National Insurance (NI) number. Need a hand finding your NI number? Read this handy guide.
To choose an investment approach - many providers offer a range of plans based on risk tolerance or personal values and religion.
To set up contributions - either a regular monthly payment, occasional lump sums, or a mix of both. With PensionBee’s self-employed pension, there’s no minimum contribution level so you can flexibly contribute as much or as little as you like.
To transfer in old pensions - if you have existing pensions from previous jobs, it might make sense to bring them together into one plan. This can simplify your retirement planning and potentially reduce any fees you’re paying across providers - more on this later!
5. Contribute regularly
To lessen the admin of manually contributing to your pension, you could consider automating your savings. Set up monthly direct debits to make sure you’re regularly putting money away. Even if this is a nominal amount, consistency is essential for building a solid pension pot. And during higher-income months, you can give your pot a boost with one-off contributions.
If you’re unsure how much to contribute every month due to that irregular paycheque, PensionBee allows flexible contributions, so you’re not locked into a fixed amount. To help you visualise how your contributions build over time, you can use PensionBee’s Pension Calculator.
6. Consolidate old pensions
It’s estimated there’s around £50 billion in lost pensions in the UK. If you have pension pots you may have forgotten about, for example from previous jobs, you could bring them together into one plan. This could help you simplify your retirement planning and give you a clearer picture of your total pension savings. It’s worth doing a bit of research before combining any old pensions. For example, to make sure you won’t be charged any additional fees, or lose any benefits.
If you aren’t sure where to start, here’s a quick guide to finding any lost pensions.
7. Review your pension annually
Rather than ‘set and forget’, it’s a good idea to take time to review your pension at least once a year. Especially if your circumstances change. For example, if your earnings increase or decrease, you start a family or move homes. Mark some time in the diary to:
- review how much you’re contributing;
- check investment performance and fees;
- adjust your contributions if your income has changed; and
- re-evaluate your risk profile as you get closer to retirement.
Build your personal pension today
Whether you’re new to self-employment or have been building your business for years, saving into a pension is a crucial part of building a strong financial future. The earlier you start, the more time your money has to grow. Providers like PensionBee make the process simple, accessible, and flexible, so you can save for the future while focusing on your own business today.
Maria Collinge is a Freelance Editor and Writer who previously worked as Global Editor at Female Invest. Her writing focuses on gender equality in finance. She’s also written for a variety of other publications including Harper’s Bazaar, The Telegraph, inews, Metro, Glamour and more.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
