Self-Employed Pension Options: The Task You Keep Putting Off
Sorting a pension is the task most founders keep pushing to "later." Here's a clear guide to your self-employed pension options in the UK, from personal pensions and SIPPs to NEST, and how to start with as little as £10.
There are many differences between being an employee and self-employed; having regular working hours and a guaranteed monthly salary may be the first things that come to your mind, but the differences in your pension are just as important.
Although the UK offers a State Pension (which requires 35 qualifying years on your National Insurance record), many workers are now contributing to a private or workplace pension due to the higher cost of living. While these schemes operate automatically for employees, those who are self-employed are entirely responsible for their own pensions, including ensuring they have made the NI contributions to qualify for the state pension.
There are a variety of options available to founders and self-employed freelancers in the UK, including providers used for workplace pensions, such as NEST. We hear from dozens of founders every month who are confused about their pension. Below, we’re exploring how pensions work when you don’t have an employer and what to know when choosing a private pension provider.
Do Self-Employed People Get a Pension?
No, self-employed people are not automatically enrolled in a workplace pension the way employees are. If you want to save for retirement beyond your State Pension, you'll need to set up and contribute to your own private pension.
Providers like PensionBee, NEST, Moneybox, and AJ Bell make it straightforward to start a private pension with flexible contributions. As a founder, you'll be responsible for choosing your provider and deciding how much to contribute each month or quarter.
What Pension Options Are Available If You Don't Have an Employer?
There isn't a one-size-fits-all solution for private pensions. In the UK, there are four main options for business founders to choose from:
Personal Pension
Anyone can open a personal pension, which allows for flexible contributions. You can deposit £5 one month and £500 the next. This pension pot works like a money purchase: what you pay in is put into investments by the provider. How much you get back depends on how much you've paid in, how the fund's investments have performed, and how you decide to take your money.
You will usually get tax relief on the money you pay into this type of pension. If you’re eligible, the government adds at least 20% tax relief to every contribution you make, putting extra money in your pot. If you’re a higher earner (above the 20% tax band), you’ll need to claim for this tax relief directly.
Self-Invested Personal Pension (SIPP)
If you want to have control over how your pension pot is invested, you can opt for a Self-Invested Personal Pension (SIPP) instead. You can take this type of pension from age 55 unless you need to retire early due to poor health. You’ll also have the option to take up to 25% as tax-free cash. Popular SIPP providers include Aviva, Vanguard, Fidelity, and JPMorgan Personal Investing.
NEST
NEST is a government-backed workplace pension provider, but it also offers pension funds for self-employed freelancers and business founders. It has low minimum contributions with strong historical investment returns.
As of 2026, the annual management fee is one of the most competitive around at 0.3%, and you can pay in as little or as often as you like, so long as each payment is at least £10.
Other UK Pension Providers for Business Founders
Although NEST is one of the most popular pension providers in the UK, there are competitors that might suit your financial situation and goals better. Some of the most popular include:
AJ Bell
Aviva
PensionBee
Vanguard
Standard Life
Scottish Widows
Fidelity
Sole Trader vs Limited Company: Does It Make a Difference for UK Pensions?
Sole traders typically make a personal contribution to their private pension and get tax relief through the pension system. Limited company directors, by comparison, may be able to make pension contributions through their companies.
These contributions can be treated as an allowable business expense in some circumstances and may reduce your company's Corporation Tax liability. This is one area where the right structure matters, and it's worth reading up on what to expect when you're expecting and self-employed if you're weighing up how your business setup affects your wider finances. Always consult your accountant or financial adviser to find the best option for your business.
How Much Should You Pay Into Your Pension?
There's no magic number for how much you should contribute each month or year. The right amount varies depending on your income, existing savings, and future goals.
Depending on where your business is, you might only be able to put away £20 or £30 a month. Those small contributions still matter, and they beat waiting until you're earning "enough" to start thinking about your pension.
Starting small helps you build the habit of contributing consistently until you're eventually in a position to make automatic payments towards your preferred pension total. As your income grows, you'll have more room to increase it, and there's often funding available to help you get there if you know where to look.
What to Ask Before Choosing a Pension Provider
Just like taking out a credit card or joining a new gym, it pays to do your research when choosing a pension provider. It can feel like a new provider pops up every month, and both traditional and fintech platforms have their perks.
Here are some questions to ask:
What fees are involved?
What investment options are available?
Can I pause contributions?
Is there an app for easy deposits?
Can I transfer my existing pensions to the provider?
Does it work for sole traders or limited companies?
How easy is it to manage day to day?
Common Pension Mistakes Founders and Freelancers Make
There are plenty of misconceptions around pensions for founders and freelancers. Many entrepreneurs end up in the same position because they've been avoiding their pension or haven't been making meaningful contributions.
Don't tell yourself you'll start "later." You can sign up with a provider in a few minutes and kickstart your pot with as little as £10. As your income grows, review how much you're contributing every three to six months.
One thing founders often overlook is that they may already have a pension. If you've previously worked in the private sector, you might have an old workplace pension sitting somewhere. Rather than leaving multiple pensions scattered across different providers, it's worth consolidating them into one pot.
Starting a Private Pension Doesn't Have to Be Complicated
Most founders have a never-ending to-do list. It's tempting to add "sign up for a private pension" to it and keep pushing it down, but this is one task worth doing sooner. No contribution is too small, and there's a private pension option to suit every freelancer, business owner, and founder.
Don't wait until your business is highly profitable to start. It's a goal you can aim for in your first year. Block out a power hour in your calendar and get your private pension set up this week. Your future self will thank you.
