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Starting a personal pension is a good way of saving for your future without relying on an employer. If you’re self-employed, keeping money back in preparation for retirement might seem a long way off, but you’ll be glad you did it when you reach pension age.
Find the best pension for the self-employed based on low costs, DIY investments, and pension consolidation using the guide below.
Best Self-Employed Pension – Our Recommendation
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 8.3 | Visithl.co.uk | ||
 | 7.9 | Visitajbell.co.uk | ||
 | 6.5 | Visitbestinvest.co.uk |
Best Self-Employed Pension Compared & Reviewed
Here’s our selection of the best self-employed pension providers and what type of saver they are most suitable for based on their specific qualities and perks.
Best for DIY investors – Hargreaves Lansdown
Best for small to medium DIY portfolios – AJ Bell
Best for saving with low costs – Bestinvest
Best for high net worth savers – Netwealth
Best for hands-off approach – Moneyfarm
Best robo advisor platform – Nutmeg
Best for simple pension consolidation – PensionBee
Best overall – Penfold
Hargreaves Lansdown – Best for DIY Investors
Annual platform fee | Between 0.45% and 0% |
|---|---|
Minimum investment | Lump sum – £100, Monthly – £25 |
Account type | DIY & ready-made |
Investment options | Over 3,000 funds for DIY investingAdventurous, Moderately Adventurous, Balanced, and Cautious pension plans |
Cost for £50,000 pension pot | £225 |
Cost for £500,000 pension pot | £1,750 |
Hargreaves Lansdown is one of the largest financial institutions in the UK, and as such, it provides self-employed savers with plenty of personal pension options. Suitable for all savers who want to take a hands-on approach and create their ideal portfolio. Far from the cheapest option, HL is a premium personal pension provider that will give you the necessary tools to use your investing skills and create the retirement fund you want.
- An FTSE 100 company
- Multiple types of accounts available
- Offers a vast array of investment options and financial advice
- Provides high-quality educative resources and market insights
- Mid to high price range option
- Costly share dealing and ETF fees
- Doesn’t offer a demo account
- Designed for experienced investors
AJ Bell – Best for Small to Medium DIY Portfolios
Annual platform fee | Between 0.25% to 0% |
|---|---|
Minimum investment | Lump sum – £1,000, Monthly – £25 |
Account type | DIY & ready-made |
Investment options | Over 2,000 funds for DIY investingCautious, Balanced, Adventurous, and Income portfolios |
Cost for £50,000 pension pot | £125 |
Cost for £500,000 pension pot | £875 |
AJ Bell is a trusted private pension provider offering a user-friendly platform for retirement savings. The platform is an excellent all-arounder offering DIY and ready-made investment options, making it ideal for experienced investors and self-employed savers who seek a hassle-free approach. Its pricing structure is very competitive and gives the best value for money when used for creating smaller portfolios.
- Very cost-efficient platform fee for small and medium portfolios
- Additional fees are kept to a minimum
- Good variety of account types and investment options
- Easy to use on desktop and mobile
- Though inexpensive, a fixed fee would be a better option for large portfolios
- Limited research tools and resources
- Not the most beginner-friendly option on the market
- Even though the additional fees are small, they can add up
| Name | Score | Visit | Support | Mobile | Security | Commission | Disclaimer | |
|---|---|---|---|---|---|---|---|---|
| 7.9 | Visitajbell.co.uk | Phone, Live Chat, Email | Android, iOS | 2FA, Biometrics |
Bestinvest – Best for Saving With Low Costs
Annual platform fee | Between 0.2% to 0% |
|---|---|
Minimum investment | No minimum investment requirements |
Account type | DIY & ready-made |
Investment options | Over 1,500 funds for DIY investingMaximum Growth, Adventurous, Growth, Cautious, Sustainable Cautious, Conservative, Balanced, Income, Defensive, and Smart Maximum Growth portfolios |
Cost for £50,000 pension pot | Ready-made portfolios – £100, Other investments – £200 |
Cost for £500,000 pension pot | Ready-made portfolios – £1,000, Other investments – £2,000 |
Our choice for self-employed savers looking for a cost-effective investment platform without compromising on quality is Bestivnest. Despite not specialising in a particular area, Bestinvest provides a well-rounded platform with diverse investment options and services. Whether you prefer a hands-on approach or professional guidance, Bestinvest caters to different investor preferences while keeping costs in check.
- Affordable platform fee for pension pots of all sizes
- No minimum deposit requirements
- Good variety of investment options
- Expert and smart portfolios available
- Offers investing in UK funds only
- Charges additional fees for its smart portfolios
- Doesn’t offer a demo account
- Not the best research resources offered on the market
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
| 6.5 | Visitbestinvest.co.uk |
Netwealth – Best for High Net Worth Savers
Annual platform fee | Between 0.70% and 0.40% |
|---|---|
Minimum investment | Lump sum – £50,000 |
Account type | Ready-made |
Investment options | Users can choose between seven ready-made portfolios with different levels of risk |
Cost for £50,000 pension pot | £350 |
Cost for £500,000 pension pot | £3,125 |
With noticeably high minimum investment requirements, Netwealth is a reputable financial platform that caters to savers with large pension pots. Managed by professional advisers, the platform is not designed for DIY investors but rather for busy individuals seeking a hands-off approach to wealth management. Ideal for affluent individuals looking to set and forget, Netwealth offers the opportunity to generate returns without the need for active involvement.
- Excellent track record
- Gives savers access to professional advisers
- A variety of account types are available
- Suitable for “set and forget” investing
- One of the costliest platforms on the market
- Huge minimum investment requirement
- Considerable fund fees and trading costs
- Not ideal for savers who prefer a hands-on approach
Moneyfarm – Best for Hands-off Approach
Annual platform fee | Between 0.75% and 0.25% |
|---|---|
Minimum investment | Lump sum – £500 |
Account type | Ready-made |
Investment options | Uses in-house risk tolerance assessment and matches the user with one of seven different ready-made portfolios |
Cost for £50,000 pension pot | Actively managed portfolio – £340, Fixed allocation portfolio – £225 |
Cost for £500,000 pension pot | Actively managed portfolio – £2,315, Fixed allocation portfolio – £1,725 |
Moneyfarm is a leading digital investment platform, particularly popular among busy, self-employed investors looking for a simple way to save for retirement. Even though the platform is very well-rounded, its highlights are the automated plans and personalised portfolios. Savers just need to take a quick risk assessment and input their preferences, and an algorithm will match them with a portfolio that best suits their investing style.
- Automated investing with a solid track record
- Easy to use and beginner-friendly
- Allows busy savers to invest with the “set and forget” method
- Provides financial advice
- Automated investing could be considered a disadvantage by some savers
- Somewhat costlier than the competition
- Minimum investment requirements could be lower
- Very convoluted platform fee structure
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 7.5 | Visitwww.moneyfarm.com/uk/ |
Nutmeg – Best Robo Advisor Platform
Annual platform fee | Between 0.70% and 0.25% |
|---|---|
Minimum investment | Lump sum – £100 |
Account type | Ready-made |
Investment options | Fully Managed, Smart Alpha, Socially Responsible, and Fixed Allocation portfolios |
Cost for £50,000 pension pot | Fully Managed, Smart Alpha, and Socially Responsible portfolios – £350, Fixed Allocation portfolio – £175 |
Cost for £500,000 pension pot | Fully Managed, Smart Alpha, and Socially Responsible portfolios – £2,100, Fully Managed, Smart Alpha, and Socially Responsible portfolios – £1,450 |
As more and more investors turn to robo advisors, Nutmeg quickly became one of the UK's most popular digital wealth management platforms. Self-employed savers who don’t have the time to manage their retirement funds will appreciate Nutmeg's intuitive interface, ease of use, and simplicity. The platform can create a personalised plan tailored to all kinds of individual risk profiles and financial goals conveniently and completely hassle-free.
- Ideal for inexperienced investors
- Easy to set up and use with simple investment options
- Eliminates quite a few additional charges
- Surprisingly wide range of supporting tools and resources
- Doesn’t have a perfect track record
- Somewhat costly platform fee compared to other robo platforms
- Lacking DIY features for experienced investors
- Accounts exceeding £1 million get no financial relief
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 7.6 | Visitnutmeg.com |
PensionBee – Best for Simple Pension Consolidation
Annual platform fee | Between 0.50% and 0.25% |
|---|---|
Minimum investment | No minimum investment requirements |
Account type | Ready-made portfolios |
Investment options | Tracker, Tailored, Fossil Fuel Free, Impact, 4Plus, Shariah, Preserve, and Pre-Annuity pension plans |
Cost for £50,000 pension pot | £250 to £475 |
Cost for £500,000 pension pot | £1,500 to £2,850 |
What experienced investors see as limiting, savers who just need a simple platform where they can save for their retirement see as liberating. Not everyone has the time or the knowledge to navigate complex pension systems, which is why PensionBee is so popular among self-employed savers. The platform is ideal for savers who don’t need to micromanage every decision and easily consolidate their previous pensions into one.
- Simplifies pensions, ideal for beginners
- Great for consolidating multiple pensions
- Cost-efficient platform
- Minimal additional charges
- Doesn’t offer financial advice
- Doesn’t accept international pensions
- Doesn’t allow the transferring of public sector pensions
- May be limiting for experienced investors
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 6.0 | Visitpensionbee.com |
Penfold – Best Overall
Annual platform fee | Between 0.75% and 0.45% |
|---|---|
Minimum investment | No minimum deposit |
Account type | Ready-made |
Investment options | Lifetime, Standard, Sustainable, and Sharia pension plans |
Cost for £50,000 pension pot | Lifetime, Standard, and Sustainable plans – £375, Sharia plan – £440 |
Cost for £500,000 pension pot | Lifetime, Standard, and Sustainable plans – £2,250, Sharia plan – £2,650 |
It’s evident Penfold was designed with self-employed savers in mind. It’s a no-brainer that it’s the best overall pick. It lacks investment options, but it more than makes up for simplicity and user-friendliness. Penfold recognises that savers need a hassle-free pension solution without unnecessary complexities.
- Absolutely beginner friendly
- Quick and easy set-up
- Simple consolidation process
- Offers flexible contributions (massive advantage for self-employed)
- Limiting for experienced investors
- Not the cheapest platform fee
- No financial advice
- No educational resources
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 7.5 | Visitgetpenfold.com |
How We Rate & Review Providers
When selecting the best pension provider for self-employed savers in the UK, we employ a rigorous rating and review process. Our assessment is based on several key factors that we consider crucial for an optimal pension experience.
Regulation – We assess providers to ensure they are authorised and regulated by reputable bodies like the FCA, ensuring compliance with industry standards and protecting savers' interests.
Flexibility – Self-employed individuals often require a pension scheme that can adapt to their ever-changing circumstances. We look for providers offering a range of investment options, contribution flexibility, and the ability to adjust as the saver's financial situation evolves.
Track record – We examine the provider's performance over the years, analysing factors such as investment returns and customer satisfaction. A provider with a solid history of delivering consistent returns and maintaining customer trust will likely be rated higher and feature on our lists.
Affordability – While value-for-money is an essential quality for any service, affordability is even more impactful for self-employed savers with irregular income streams. We evaluate the fee structures, charges, and costs associated with each provider's pension plans to ensure they are transparent, competitive, and offer good value.
Ease of use – Self-employed individuals often value efficiency and simplicity in managing their pension. We assess the user-friendliness of the provider's online interface, the availability of digital tools and resources, and the overall customer experience to ensure that savers can easily navigate and manage their pension arrangements.
By evaluating these aspects, we aim to provide self-employed savers with reliable information to make informed decisions and select the best pension provider that aligns with their specific needs and preferences.
Workings of Self-Employed Pensions
While there are many advantages to being self-employed, getting no access to a workplace pension scheme is definitely one of the biggest drawbacks.
People with employer-sponsored pension schemes get some level of financial security for the future by simply working and getting paid. The automatic deductions from their paychecks into the pension scheme may not be enough to retire comfortably for everyone, but they at least provide a convenient and consistent way to save for retirement.
On the other hand, self-employed workers have to figure things out by themselves and take individual initiative to plan and save for their retirement.
Without any employer contributions, self-employed individuals set up personal pension plans with pension providers or financial institutions. These plans allow them to contribute and save for retirement independently.
Relying solely on the state pension as a self-employed individual may not be sufficient for a comfortable retirement. The state pension provides a basic income level, subject to eligibility criteria and potential changes in the future. It may not keep pace with inflation or meet your personalised retirement goals.
By proactively saving and planning through private pension arrangements, you have more control over your financial future and can work towards achieving a desired standard of living in retirement. Being self-reliant and taking ownership of your retirement savings ensures greater financial security and peace of mind.
Let’s dive deeper into some of the most popular self-employed pensions and understand precisely how they work.
Personal Pension Plan
One of the most popular ways that self-employed individuals save for retirement is by opening a personal pension plan and contributing to it on a monthly basis. Since the plan belongs to them and not their employer, they can choose the pension provider and make decisions regarding their pension contributions and investment options.
In other words, they can decide how much they want to contribute regularly or make lump-sum payments per their financial circumstances.
The investment options offered with personal pension plans vary from one provider to the next, but it’s a common practice for most providers to offer a few pre-made plans, commonly known as ready-made portfolios.
What is a ready-made personal pension?
A ready-made personal pension is a type of pension plan that is pre-packaged and designed to be easy and convenient for individuals to set up and manage. It’s often offered by pension providers or financial institutions and is designed to cater to different risk profiles and investment objectives.
With a ready-made personal pension, individuals do not need to choose and manage their investments actively. Instead, the pension provider handles the investment decisions on their behalf. The provider typically offers a range of investment options that are already diversified across different asset classes, such as funds, stocks, bonds, and cash.
Ready-made personal pensions are aimed at individuals who prefer a simplified approach to pension investing and want to avoid being heavily involved in the day-to-day management of their investments.
These pension plans provide a hands-off approach, allowing individuals to rely on the expertise and guidance of the pension provider to manage their investments and potentially generate returns for their retirement savings.
Self-Invested Personal Pension
SIPP is a type of personal pension plan that offers individuals greater control and flexibility over their investments compared to traditional personal pension plans. With a SIPP, individuals have the option to choose and manage their own investments within their personal pension scheme.
Unlike ready-made personal pensions, SIPPs allow individuals to have a wider range of investment options, including individual stocks, bonds, commercial property, and collective investment funds. This gives them the opportunity to tailor their investments according to their risk tolerance, investment knowledge, and financial goals.
SIPPs are suitable for self-employed individuals who have a good understanding of investments and are willing to actively manage their pension funds. They provide the freedom to make investment decisions and potentially benefit from higher returns, but they also require individuals to take on the responsibility of monitoring and adjusting their investments as needed.
Furthermore, SIPPs offer flexibility regarding how individuals can access their pension benefits in retirement. They can choose from various options, such as taking a lump sum, purchasing an annuity, or drawing a regular income. The availability of these options may depend on the specific rules and regulations governing the SIPP and the individual's age at retirement.
Other Types of Pensions
Private pensions, or personal pensions, are individual retirement savings plans that individuals can set up independently. They are not tied to employment or provided by an employer or the government. Private pensions offer individuals more control and flexibility over their investments and retirement planning.
Other types of pensions include workplace pensions, provided by employers to their employees, and state pensions, which are government-provided retirement benefits based on national insurance contributions. Workplace pensions are typically structured and managed by the employer or a pension provider appointed by the employer. State pensions are determined by the UK government's social security system and eligibility criteria.
As we previously mentioned, there are some tax benefits associated with pensions.
Every time you contribute to a pension scheme, you receive tax relief on the amount you contribute. In other words, for every pound you contribute, the government adds tax relief based on your income tax rate.
Any investment growth or returns generated are generally tax-free once your contributions are invested in a pension scheme. This allows your pension savings to grow more efficiently over time.
However, there are some limits on the total amount you can accumulate in your pension funds without incurring additional tax charges, called the annual and lifetime pension allowances. As these allowances are subject to change, it’s best you check out the official government website and find out exactly how much you can contribute without incurring tax penalties.
When you reach the age of 55 (increasing to 57 in 2028), you can typically take up to 25% of your pension pot as a tax-free lump sum. The remaining portion can be used to provide retirement income, subject to income tax, when withdrawn.
When you start taking income from your pension, it’s treated as taxable income. The amount withdrawn will be added to your other income sources, such as salary or rental income, and taxed accordingly based on your income tax rate.
Compare Your Options Further
- Before you start planning trips you want to take in your golden years, you need to ensure there will be enough gold in that pot. You probably have a workplace pension already, but you can explore self-invested personal pensions if you feel a bit more adventurous.
- Self-invested personal pensions (SIPPs) and personal pensions are popular retirement-planning options in the UK. And yet, many Brits know little about these concepts. To help you out, we cover the fundamentals of SIPP and personal pensions, how they stack up against each other, and what you should consider when making a decision.
- Saving for your future is essential, but finding the right way to invest your money can be overwhelming. For example, should you pay into an ISA or a pension plan? Let's down the options and find out.
- House prices have been on the rise for many years, and it's no wonder why so many people are turning to property as an investment option. However, investing in a pension or increasing pension contributions can also be incredibly beneficial as they are supported by government tax relief. So, which one is the better investment – pension or property? Let's find out!
How to Find the Best Self-Employed Pension Provider in 2024
To find the best self-employed pension provider, you can follow these steps:
Research pension providers – Look for well-established companies with a good reputation and track record in providing pensions. Consider traditional pension providers and newer digital platforms offering self-employed pension options.
Compare fees and charges – Consider factors such as annual management charges, platform fees, transaction costs, and any other applicable fees. Compare these fees across different providers to ensure you're getting the best value for your money.
Investment options – Look for a provider that offers a wide range of investment choices that suit your risk tolerance and investment goals. Consider whether the provider offers a default investment option or if you have the flexibility to choose your own investments.
Flexibility and features – As a self-employed individual, you may have fluctuating income or irregular contributions, so choosing a provider that accommodates these needs is crucial. Look for features like the ability to make flexible contributions, pause or increase contributions, and adjust your investment strategy as needed.
Customer support and digital tools – A good customer support team can assist you with any queries or issues that arise. Additionally, user-friendly online platforms or mobile apps can make it easier for you to manage your pension account effectively.
Seek recommendations and reviews – Consider joining online communities or forums where you can ask for recommendations or read about others' experiences with different pension providers.
Seek professional advice – They can provide personalised recommendations based on your retirement goals, risk tolerance, and financial situation.
Finding the best self-employed pension provider is a subjective decision; what works for one person may not be the best fit for another. Take the time to assess your needs and compare different providers before deciding.
FAQ
What are the costs associated with self-employment?
When can you access funds from a self-employment pension?
Are self-employed pensions safe?
- A limited company pension provides a tax-efficient way for the company to build your pension pot for retirement. According to the latest data, most companies in the FTSE 100 channel between 7.5% and 11.5% of the director’s salary to their pensions.
- When you leave an employer, any benefits that have been accrued in your pension will not be lost, as the fund actually belongs to you. This means that even though you are no longer working with that particular company, you will remain a member of their pension scheme and your money will stay invested as it was prior to leaving.
- Your child might be decades away from retiring – but helping them build their pension early on will help them have a sizable pot once they reach retirement age. With the ability to deposit up to £3,600 per year without paying income or capital gains tax, a junior SIPP account is an excellent way to do so.
- Regardless of your current financial situation and how young you are, building a substantial pension pot is essential. People work throughout most of their lives, and their retirement is the only time they can kick back, relax, and enjoy the benefits of their hard work.
- What is (hopefully) one of the cheeriest of occasions, retiring abroad, can and often is soiled by an endless amount of paperwork and one big question: whatever will happen to my pension? It seems daunting, but once you understand the process, you'll see it's not rocket science. Here, we explain how it works.
- The key to successful retirement planning is understanding the options available and finding one that works for you. Whether you're an employee or a self-employed individual, having a pension plan is a secure way to ensure you will have a steady stream of income during your retirement years.
- A drawdown pension can come in handy during retirement as it allows the holder to draw money from their pension pot as and when they need it. With the right drawdown pension plan, it’s possible to achieve maximum long-term growth with minimum risk. In this guide, we will be looking at the best-performing drawdown pensions available to help you make the best decision for your financial future.
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