From PAYE to freelancer (and back again): how to supercharge your pension

I recently celebrated my five-year anniversary of becoming self-employed. It’s been a blur of exciting projects and clients, and I’ve enjoyed a decent work-life balance (most of the time).

But, of course, there are challenges that come with being a freelancer. Namely, that’s chasing invoices and the lack of perks like annual leave and, in particular, employer pension contributions.

Setting up a pension as a freelancer can feel daunting. And retirement planning can become trickier when you mix employed and self-employed work, like I have. 

I’ve gone from PAYE to freelancer (and back again!). I’ve had spells as a part-time contractor where employers have signed me up to pension schemes thanks to Auto-Enrolment. That left me with lots of little pots dotted around.

However, taking control of your nest egg and planning for life after work doesn’t need to be time-consuming or difficult. 

Here’s what I’ve learnt about maximising my pension while juggling employed and freelance work - and how you can supercharge your savings as you progress your career.

1. When you go freelance, carry on contributing

One of the biggest risks when moving from PAYE employment is forgetting about your pension altogether. 

Without the contributions coming straight out of your payslip, the responsibility falls to you. That leads many self-employed people to not contribute, with data showing less than a fifth do. 

Fortunately, you can continue making contributions, including to a pension you already hold.

When you leave a company, you may be able to continue making personal contributions to the workplace scheme. Ask your pension provider if you’re unsure, and bear in mind you won’t receive any more contributions from your previous employer.

Alternatively, you can set up a personal pension when you’re self-employed. 

Building pension contributions into your monthly budget helps maintain momentum. Even if your income fluctuates, you'll still keep paying into your pot if you're used to doing so.

You might be worried about your earnings when you start as a freelancer. In that case, you could consider setting a low monthly payment and topping up in higher-earning months. I began my self-employed pension with £100 a month and paid in more when I’d done my tax return and knew how much I had left over.

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2. Make the most of tax relief

You don’t get employer contributions as a freelancer. But did you know that you’ll usually still get tax relief from the government?

Most basic rate taxpayers get tax relief on their personal contributions. So, for every £80 you pay into a pension, the government will add £20, boosting it to £100. If you’re a higher or additional rate taxpayer, you can claim back more via your Self-Assessment tax return.

This makes pensions one of the most tax-efficient ways to save. Just keep an eye on the annual allowance. That’s the limit on the gross amount that can be saved into a pension each tax year without incurring tax charges.. 

The current standard annual allowance for pension contributions is £60,000 (2026/27) - this includes personal, employer and any third party contributions.

There’s a separate limit on tax relief. You can receive tax relief on personal and third party contributions (excluding employer contributions) up to 100% of your relevant earnings, capped at £60,000 per year (2026/27).

3. Tidy up time

It’s key to stay across and dedicate time towards your pension admin.

Most of us will accumulate a few pension pots throughout our working lives. You might well have a few from your time as an employee. 

Look out for companies auto-enrolling you for freelance work too. Auto-Enrolment doesn’t technically cover the self-employed. But if you’ve signed up to a temporary part-time contract, or, say, a zero-hours contract, you could find yourself tipped into a pension scheme.

That’s because most employers have a duty to enrol eligible staff on their payroll who:

• work in the UK;
• are at least 22 years old, and haven't reached State Pension age;
• earn more than £10,000 a year; and
• aren't already a member of a suitable workplace pension scheme.

So, if you meet these criteria, you’d be auto-enrolled in the scheme unless you opt out.

For example, one newspaper I freelanced for on an ad-hoc basis started paying me via PAYE. Before long, I became a member of their pension scheme. 

Likewise, a wealth manager I worked for as a content editor for three days a week also enrolled me into their workplace pension.

It could be simpler to combine these pensions into a single plan. This can make things easier to manage and give you a clearer view of your total retirement savings. It may also reduce fees you might be paying across multiple providers. 

However, consolidation isn’t right for everyone. For example, you may lose valuable benefits by transferring, so check these first before you make a decision.

Set aside half a day to run through your pension admin. If you’ve opened a new personal pension as a freelancer, it could make sense for you to consolidate some of your old ones into it.

4. Dial up those contributions

If you’ve been freelancing for a while, it’s worth considering whether you can pay more into your pension. Contributing a higher amount could help you build a larger pot. In turn, that might result in a more comfortable retirement, or even allow you to retire early.

If you’re contributing £100 a month, can you stretch to £150 or £200? You can usually change the amount if you have months when you earn more or less, too (check with your pension provider if you’re unsure). 

So, if you dial up during a lucrative year, you can dial down again if needed. For instance, if your earnings go through a dry patch or you have a large, unexpected bill, you can always cut back.

With PensionBee, you can make one-off contributions or set up a regular bank transfer. There are no minimums and you can adjust the amount you pay in, too. That flexibility can be highly useful when you’re working for yourself.

As long as it’s within the limits I mentioned above, a higher contribution usually attracts more tax relief. That might give your nest egg a double boost, which could even upgrade your retirement. 

With extra funds to hand, you might not have to think twice about affording theatre trips with friends, or booking that dream holiday.

5. Returning to employment and boosting your savings

If you move back into a salaried role, one of the big benefits over being self-employed is that you’ll usually get employer pension contributions.

If you’re eligible under Auto-Enrolment, a minimum of 8% of your eligible earnings will be contributed to the workplace pension, unless you opt out. Of that, your employer must pay at least 3%. 

So, as standard, they’ll contribute 3%, you’ll pay 4%, and the government adds 1% tax relief to your contribution. 

But, many companies pay in more than 3%, especially if you also contribute above the minimum. Some employers ‘match’ your contributions - for instance, if you pay in 6%, they’ll pay 6% too. This is a great way to turbocharge your retirement savings.

Giving up just a small amount of take-home pay today could be worth more by the time you stop work and retire.

Maintaining your pension contributions, no matter your work status

Whether you’re working for yourself or someone else, you want to make the most of the money you earn.

That’s why it can be sensible to keep paying into a pension when moving from employment to self-employment or the other way.

The tax relief on offer can make it an efficient way to keep hold of more of your earnings. And your provider will usually invest your contributions, offering the potential for growth over time.

No matter your employment status now, a pension could help you set aside what you need to enjoy life after work.

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Ruth is an award-winning Journalist with more than 15 years' experience of working on national newspapers, websites, and specialist magazines. She's passionate about helping people feel more confident about their finances. 

She was previously Deputy Money Editor at The Sunday Times, and now freelances for a range of titles including The Telegraph, The Observer, and MoneyWeek.

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Risk warning

As always with investments, your capital is at risk. Past performance is not an indicator of future performance. 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.