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Always remember that investments can go down as well as up in value, so you could get back less than you put in. How you are taxed will depend on your circumstances, and pension and tax rules can change.
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The best pensions for the self-employed in the UK are Self-Invested Personal Pensions (SIPPs), Stakeholder Pensions, and Lifetime ISAs. All three pension schemes allow you to contribute to a savings pot throughout your working life and spend from when you retire.
Below, we’ve compiled a list of the best private pension providers for self-employed people in the UK. These are our top twelve SIPPs and Stakeholder Pension schemes for buying, selling, and holding UK and overseas stocks and shares, bonds, index funds, exchange-traded funds (ETFs), ready-made investments and other investment products. Some of these providers also offer Lifetime ISAs–we tell you which ones do below.
Please remember that when you invest, your capital is at risk. You usually can’t access the money in your pension until you are at least 55 years old (increases to 57 in 2028), when you can take 25% as a tax-free lump sum. Other pension and tax rules apply.
The pension providers listed below are authorised and regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or The Pensions Regulator (TPR).
Here are the best private pension providers for the self-employed in the UK:
Interactive Investor, recently acquired by wealth management giant Abrdn, is the second-largest investment platform in the UK. Interactive Investor is well known for its fixed monthly subscription fees (as opposed to annual percentage-based fees like most other investment platforms). It has been providing investment services and financial information to UK customers since 1995. If you choose to invest with Interactive Investor, you will gain access to over 40,000 investment options, including UK and overseas shares, funds, investment trusts, and ETFs. This is the second-widest choice of UK and international investments offered by an investment platform in the UK.
The Interactive Investor SIPP allows you to build your pension portfolio in multiple ways depending on your retirement goals, attitude to risk and investment preferences. Beginner investors or those who prefer a ready-made investment portfolio can build their pension pot using Interactive Investor’s Quick-Start Funds, an easy way to start investing where you choose from six low-cost funds prepared by the team of experts at Interactive Investor. Advanced or more confident investors can choose from a wide range of funds and shares and build their pension portfolios themselves. Interactive Investor gives you access to 17 global stock exchanges, including exchanges in North America, Europe and Asia Pacific.
With Interactive Investor, You can combine your other pensions into one SIPP for simpler retirement planning. When you reach retirement age, Interactive Investor will provide a range of options for taking an income from your pension, and there is no extra charge for this. To open a SIPP with Interactive Investor, there is a subscription fee of £5.99 or £12.99 per month, depending on the value of your portfolio. UK and US trades cost £3.99 per trade. Interactive Investor also offers a free regular investing service that allows you to contribute as little as £25 a month to your pension pot without paying a trading fee each time. The platform also has a host of expert ideas, research and insights, which can be helpful when choosing investments. Visit Interactive Investor to learn more. Interactive Investor’s suite of products includes a Stocks and Shares ISA, Trading Account, Junior ISA and SIPP.
Special offer: Open a pension before 31 December 2023 and receive cashback up to £200. New customers only. Minimum £15k investment. Terms apply.
Please note: When you pay into a pension, your capital is at risk.
AJ Bell is one of the UK’s largest online investment platforms, and its mission is to make investing as easy as possible for you. The platform offers a wide range of investment options, including UK and overseas shares, funds, bonds, ETFs, investment trusts, and ready-made investments. AJ Bell was the first investment company in the UK to offer an online Self-Invested Personal Pension (SIPP).
The AJ Bell SIPP allows you to build your pension portfolio in one of two ways depending on your investing savviness and attitude to risk: beginner investors or those who prefer a ready-made investment portfolio can get a little, or a lot, of help from AJ Bell’s specialists by choosing from the eight investment ideas on offer. Investment ideas are diversified ready-made baskets of investments that you can select based on your personal preferences, investment goals and risk tolerance. Advanced or more confident investors can choose from the thousands of instruments available and build their pension portfolios themselves. The AJ Bell SIPP is suitable for both the self-employed and those looking to open a personal pension to complement their workplace pension. AJ Bell also lets you combine your existing pensions into a SIPP so that you can see and control everything in one place. This helps you understand how your pension is performing and exactly what you are paying in charges. AJ Bell will pay up to £500 towards your exit fees when you transfer your pensions to them (terms apply).
It is free to open a SIPP with AJ Bell. The minimum initial deposit is £500 (lump sum) or £25 per month (if you choose the regular investing service). The regular investing service allows you to automatically invest the same amount of money every month at a reduced dealing fee. AJ Bell charges an annual platform fee ranging from 0.25% to 0%, depending on the size of your portfolio. Dealing fees for buying and selling investments online are £1.50 per deal for funds and £9.95 per deal for shares (reducing to £4.95 per deal if there were 10 or more online share deals in the previous month). Visit AJ Bell to learn more. AJ Bell’s suite of products includes a Share Dealing Account, Stocks and Shares ISA, Junior Stocks and Shares ISA, Lifetime ISA, SIPP and Junior SIPP.
Please note: When you pay into a pension, your capital is at risk.
Moneybox is a UK investment app that allows you to build a personal pension portfolio from a range of tracker funds. You can also invest in line with your beliefs and values, as the range of funds includes an ESG fund and an Islamic shares fund. With the Moneybox pension, you can track down your old workplace pensions and combine them into one. You can also set up weekly deposits, switch on a monthly payday boost or make one-off deposits whenever you like.
The Moneybox app will empower you to invest your spare change into your pension pot by rounding up your card transactions to the nearest pound and investing the difference on your behalf. For example, if you spend £2.30 on a snack, Moneybox will invest 70p for you.
You can start investing with Moneybox with as little as £1. For the first £100,000 deposited into your Moneybox account, the pension fee is 0.45% per year. On a balance over £100,000, this amount will be charged at 0.15% per year. A fund provider fee also applies to all funds. This will be between 0.12% to 0.61% per year, depending on the fund you choose. Visit Moneybox to learn more. Moneybox’s suite of products includes a Stocks and Shares ISA, Lifetime ISA, Junior ISA, Personal Pension, and General Investment Account.
Please note: When you pay into a pension, your capital is at risk.
Bestinvest is a UK low-cost investment platform that allows you to trade or invest in over 3,000 instruments, including shares, funds, ETFs, and investment trusts. With Bestinvest, you can build your pension pot in one of two ways depending on your personal preferences, goals and attitude to risk.
Beginners or those who prefer a ready-made investment portfolio can build their pension pot by selecting one of Bestinvest’s ready-made investments. These off-the-shelf style portfolios are created and managed by the team at Bestinvest and come with a carefully selected and diversified collection of investments. Once you have picked one, you do not need to do anything else. There are three ranges to choose from: Expert, Smart and Direct, depending on whether you want to maximise the returns for the risk you take, focus on cost-efficiency or focus on individual investments. The team at Bestinvest will walk you through the process of selecting a ready-made portfolio. Advanced or more confident investors can choose from a wide range of funds, shares, ETFs and ITs and build their pension portfolios themselves. If you have multiple pensions, Bestinvest can help you consolidate them into one to make them easier to manage and review. With fewer pension providers, you could save money in fees and might have less paperwork to deal with. Bestinvest will pay up to £500 towards your exit fees when you transfer your pensions to them (terms apply).
To start building your pension pot with Bestinvest, you can deposit a lump sum or set up a monthly savings plan which allows you to automatically save or invest a set amount into your SIPP every month. There are no set-up fees or fund dealing charges with the Bestinvest SIPP. Bestinvest charges an annual platform fee ranging from 0.40% to 0% for DIY investing and 0.20% to 0% for ready-made investing. The dealing fee for buying and selling shares online is £4.95 per deal. Visit Bestinvest to learn more. Bestinvest’s suite of products includes a Stocks and Shares ISA, Junior Stocks and Shares ISA, General Investment Account, SIPP and Junior SIPP.
Special offer: Up to £1,000 cashback when you transfer and invest. Terms apply.
Please note: When you pay into a pension, your capital is at risk.
Hargreaves Lansdown is a FTSE 100 company and the largest investment platform in the UK. Its core mission is to build long-term client relationships by becoming a trusted partner and financial champion, ultimately helping you increase your financial security for the future. If you choose to invest with Hargreaves Lansdown, you will gain access to over 15,000 instruments, including over 2,500 funds, UK and overseas shares, bonds, ETFs, ETCs, investment trusts and more.
With Hargreaves Lansdown, you can build your pension portfolio in three ways. You can pick your own investments to match your values and goals, select ready-made portfolios, or pay a financial adviser to choose investments for you. The ready-made portfolios can be used as all-in-one investments. Pick one from the different risk levels, and you are good to go. You will still have to monitor your portfolio as with any other investment. If you pay for financial advice, the specialist investment adviser will recommend a suitable portfolio of investments for your goals and ensure that your portfolio is cost-effective, well-balanced, diversified, and ideal for your stage in life. Hargreaves Lansdown also allows you to combine all your existing pension pots from previous employers. This reduces your pension admin and costs and gives you a clear overview of your retirement funds, so you know exactly where you are invested and how much retirement income you can take. When you retire, Hargreaves Lansdown will provide a host of options for withdrawing your money. The Hargreaves Lansdown SIPP is also suitable for self-employed people, and it is possible to transfer your old pensions from previous employers to the same pot as your self-employed pension.
It is free to open a Hargreaves Lansdown SIPP. The minimum initial deposit is £100 (one-off) or £25 per month (if you set up a direct debit). Hargreaves Lansdown charges an annual platform fee ranging from 0.45% to 0%, depending on the size of your portfolio. Dealing shares online costs £11.95 per deal (reducing to £8.95 or £5.95 per deal if there were 10 to 19 trades or 20+ trades, respectively, in the previous month). Visit Hargreaves Lansdown to learn more. There is no dealing charge for buying or selling funds. Hargreaves Lansdown’s suite of products includes a Fund and Share Account, Stocks and Shares ISA, Lifetime ISA, Junior ISA, SIPP, and Junior SIPP.
Please note: When you pay into a pension, your capital is at risk. The Hargreaves Lansdown SIPP is intended for investors who are happy making their own investment decisions. The charges quoted here are not exhaustive–other charges apply.
Moneyfarm is a UK robo advisor that provides you with a personalised investment plan based on your risk preferences. Investors can choose from seven globally diversified risk-rated portfolios, including ethical investments. The team at Moneyfarm actively manages your investments, but each investment portfolio is made up of passive exchange-traded funds (ETFs) and other passive trackers. Customers also benefit from free and personalised digital financial advice from Moneyfarm’s investment consultants, and you can chat, phone, email, or meet your consultant in person.
If you tell Moneyfarm when you aim to retire, the team will manage your portfolio around your target retirement date - reducing your risk as the date approaches. It is easy to transfer your existing pensions to Moneyfarm. Just fill in your details in-app or online. Moneyfarm will then talk to your existing provider and move your pensions over to your Moneyfarm account. The process typically takes about 3 - 4 weeks and is as paperless as possible, depending on your provider. When you reach the retirement age of 55 (57 from 2028), Moneyfarm will provide a range of flexible options for taking an income from your pension. This is called a pension drawdown, and there is no extra charge for it.
Moneyfarm charges a yearly account management fee starting at 0.75% and reducing to 0.35% as the size of your portfolio increases. The annual average investment fund fee is 0.20%, and the annual effect of market spread comes to about 0.09%. Visit Moneyfarm to learn more. Moneyfarm’s suite of products includes a Stocks and Shares ISA, General Investment Account and SIPP.
Please note: When you pay into a pension, your capital is at risk.
Wealthify is a UK robo advisor that allows you to choose from five investment plans based on your attitude to risk. These investment plans are named Cautious, Tentative, Confident, Ambitious and Adventurous and allow you to choose a risk level that best suits your needs. If you are conscious about the environment or would simply like to invest in line with your values, Wealthify’s five portfolios are also available as ethical investment plans, so you can stay true to your values while potentially growing your money.
Wealthify charges an annual platform fee of 0.60%, and fund management fees range from 0.16% to 0.70% per year, depending on your chosen investment theme. Once you complete the signup process, you can start investing with a lump sum of £50, which you can top up as frequently as you want. Visit Wealthify to learn more.
Wealthify’s suite of products includes a General Investment Account, Stocks and Shares ISA, Junior ISA and SIPP in both Original and Ethical themes.
Please note: When you pay into a pension, your capital is at risk.
Saxo Markets is the UK division of Saxo Bank, a large European bank and investment platform that allows you to invest in 71,000+ financial products from stock markets around the world, including London, New York, Hong Kong, and 50+ global markets.
With Saxo Markets, you can build your pension portfolio with more than 11,000 global stocks, ETFs and bonds. Beginner investors or those who prefer a ready-made investment portfolio can select from one of the managed portfolios on offer, where Saxo experts navigate the markets and manage your investments on your behalf. The average cost of a managed portfolio is 0.95% per year (including fund costs). Advanced or more confident investors can choose from the range of financial products on offer and build their portfolios themselves. It’s free to open a SIPP with Saxo Markets, and all registered users have access to a personal account manager.
Saxo Markets has different transaction fees grouped into trading tiers. If you plan to trade high volumes, you can upgrade your tier to get lower transaction fees. The Classic tier, which attracts the highest trading fees, costs 0.10% (min. £8) per deal for UK stocks and US$0.02 (min. US$10) per deal for US stocks. Other fees apply. Additionally, other exchanges, such as those in Europe or Asia, have different trading fees, which you can find on Saxo Markets’ website. Saxo Markets’ suite of products includes a Trading Account, Stocks and Shares ISA and SIPP.
Please note: When you pay into a pension, your capital is at risk.
Netwealth is a wealth management platform designed for high-net-worth individuals. If you have a relatively large amount of money to invest and are looking for an intimate private wealth manager, Netwealth might be a good option for you. Netwealth’s overarching goal is to help you manage your money cost-effectively while generating a secure income over the medium to long term that may help with important financial events, such as school fees, retirement or elderly care.
When you join Netweath, you get a free initial consultation with a qualified wealth adviser to help you define your objectives and maximise your investment potential. This process informs what combination of risk levels and account types are best suited for you. The adviser will also help you put a financial plan in place and check back in with you regularly. With Netwealth, you can choose from seven ready-made globally diversified portfolios, which aim to maximise the return for your chosen risk level. You also get access to free, powerful financial planning tools to help you visualise your potential investment outcome.
The minimum investment amount to become a client of Netwealth is £50,000. This, however, can be made up of different account types and include cash deposits and transfers from other providers. For example, the minimum portfolio size for an ISA is £5,000 and £1,000 for a JISA. There is no dealing fee, but the average annual investment cost comes to about 0.30%. Other charges apply. Visit Netwealth to learn more. The Netwealth Network lets you invite up to seven people, who each benefit from a lower minimum joining deposit of £5,000, lower fees and investment independence. Netwealth’s suite of products includes a Stocks and Shares ISA, Junior Stocks and Shares ISA, General Investment Account and SIPP.
Please note: When you pay into a pension, your capital is at risk.
Vanguard is a popular low-cost investment platform with over 75 own-brand funds, including ETFs, active funds and index funds. Vanguard does not offer stocks and shares, but there are various ETFs on offer for those interested in exchange-traded securities.
The Vanguard SIPP allows you to build a pension in one of two ways depending on your investing savviness: beginner investors or those who prefer to choose a ready-made investment portfolio can build their pension pot by selecting one of the Target Retirement funds, which give you access to thousands of bonds and shares in a single investment. Advanced or more confident investors can choose from over 75 individual Vanguard funds and build their pension portfolios themselves. It is straightforward to transfer your existing pensions to Vanguard, and it is completely free to do so - although your existing provider might charge you a fee, so check with them first.
To open a Vanguard SIPP, you need at least £100 per month or a lump sum of £500. There is a yearly management fee of 0.15% (capped at £375) per year. Some of the funds on offer have separate charges, so please check these before investing. Visit Vanguard to learn more. Vanguard has other products, including a Stocks and Shares ISA, Junior ISA, General Account and Personal Financial Planning.
Please note: When you pay into a pension, your capital is at risk.
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The Aviva Stakeholder Pension allows you to invest your money in a range of funds that give you access to various assets such as stocks, shares and property. You will also be able to choose from a range of high to low-risk funds, depending on your attitude to risk.
With Aviva, you can start your Stakeholder Pension with as little as £20 a month and pay money into your pension plan either regularly, e.g. every month, or make one-off payments. You can also change that amount or stop and start payments when you need to. When you reach the retirement age of 55 (57 from 2028), you will have a number of options about how you can use your pension savings, including taking an income, lump sum or a combination of both. The Aviva Stakeholder Pension also lets you create a pension pot for your children or grandchildren. You can deposit up to £2,880 for each child per year.
With Aviva, you pay only an annual fund charge, which is capped at 1%. You will not have to pay any charges for setting up your investment or for switching money between funds. Aviva offers financial advice at a separate fee. Visit Aviva to learn more.
Please note: When you pay into a pension, your capital is at risk.
The Standard Life Stakeholder Pension allows you to invest your money in 30+ funds and 2 Lifestyle Profiles. You can invest in up to 12 funds at any one time, but if you decide to pick a Lifestyle Profile, you can only combine this with a with-profits fund.
The Lifestyle Profiles are ready-made investment portfolios that invest your money in funds and move them as you get closer to retirement, to try and get you the best possible returns for your goals. If you do not want to choose a fund, Standard Life will automatically invest your money in a Lifestyle Profile depending on goals and risk preferences.
Standard Life charges an annual management charge of 1% of the value of the funds you are invested in each year. Visit Standard Life to learn more.
Please note: When you pay into a pension, your capital is at risk.
Alternatively, the government has set up a workplace pension scheme called NEST Pensions, which is excellent for those who are self-employed. You can join NEST Pensions if you are self-employed, a freelancer or the sole director of a company that does not employ anyone else.
It might be worth consulting a regulated financial adviser if you are unsure which products to invest in or what provider to go with. Financial advisers usually charge a fee for their service, but the upside is that you are protected if the advice turns out to be unsuitable for you.
There are many websites where you can find financial advisers. Have a look at Unbiased and VouchedFor.
A self-employed pension in the UK is a personal retirement savings plan designed for individuals who work for themselves, such as solo founders or sole directors of companies with no other employees. Unlike traditional employer-sponsored pension schemes, self-employed individuals are responsible for setting up and managing their own pension pots.
When you become self-employed, you won’t be automatically enrolled into a pension scheme, as is the case with traditional employment. However, this should not scare you. Establishing a pension pot for yourself is quite straightforward, and transferring funds into it is as simple as moving money between accounts.
As a self-employed individual, you’re not only entitled to the pension you arrange for yourself, but you also qualify for the State Pension. This government-provided retirement income is based entirely on your National Insurance record. The earliest you can receive the State Pension is upon reaching the State Pension age, which is likely to be 68 if you’re currently between the ages of 20 and 39. You can confirm your State Pension age on the GOV.UK website.
The government will add money to your pension contributions in the form of tax relief (free money).
For every £80 you pay into your pension, the government adds £20 - and you can claim an extra £20 if you are a higher earner.
You can think of tax relief as a refund of the tax you originally paid on your pension contribution at your usual rate of income tax - 20%, 40%, or 45%.
It is your pension provider that claims this tax relief at the basic rate and adds it to your pension. Tax relief for higher-rate taxpayers is slightly different. If you are a higher-rate taxpayer, you will need to claim the additional rebate through your tax return. Alternatively, if you are claiming a large sum, a phone call or letter to HMRC should do the trick.
There’s a limit on the amount of money you can pay into a pension tax-free. This tax year, the limit is 100% of your earnings up to a maximum of £60,000. Any contribution above this will be taxed.
Most self-employed people use a personal pension for their retirement savings. You won’t be able to access the money saved in a personal pension until you are at least 55 years old (increases to 57 in 2028).
There are two types of personal pensions: Self-invested Personal Pension (SIPP) and Stakeholder Pension.
Due to their flexibility, Stakeholder Pensions can be of particular benefit if you are self-employed, on a low income, or not working.
Another way to save for retirement is with a Lifetime ISA. A Lifetime ISA is not a pension but a longer-term tax-free savings or investment account created to help those between the ages of 18 and 39 save for their first home or retirement. Each tax year, you can pay up to £4,000 into a Lifetime ISA. The government will add a 25% bonus to your Lifetime ISA every tax year up to a maximum of £1,000 per year, and you can continue saving or investing into a LISA until you are 50.
The best types of pensions for self-employed people in the UK are Self-Invested Personal Pensions (SIPPs), Stakeholder Pensions, and Lifetime ISAs. A SIPP offers a greater degree of control and flexibility, allowing you to manage your investments directly. Meanwhile, a Stakeholder Pension is a low-cost, simple pension scheme with government-set standards, making it an attractive choice for those seeking a more hands-off approach.
A Lifetime ISA, while not a pension, is another option to consider for retirement savings. It allows individuals aged 18 - 39 to save up to £4,000 per year, with the government providing a 25% bonus on contributions. The funds in a Lifetime ISA can be used for purchasing your first home or for retirement after the age of 60.
The advantages of a Lifetime ISA include tax-free growth and tax-free withdrawals. However, its main disadvantage is that if you withdraw funds before the age of 60 for any reason other than buying your first home, you will incur a withdrawal penalty, losing the government bonus and facing an additional charge.
Additionally, the government has set up a workplace pension scheme called NEST Pensions, which is also open to the self-employed. You can join NEST if you’re self-employed or the sole director of a company that doesn’t employ anyone else.
Here are the best pension providers for self-employed people:
Yes, pensions are absolutely worth it for the self-employed. They provide a valuable source of income in retirement, and thanks to the tax relief on contributions, they offer a tax-efficient way to save. While self-employed individuals may not benefit from employer contributions, the advantages of a pension, such as compound interest and a diverse range of investment options, make it an indispensable part of one’s long-term financial planning.
A self-employed person should aim to contribute at least 10% of their annual gross income towards their pension, similar to employed individuals. However, this figure may vary depending on factors such as the age at which you plan to retire, your desired retirement lifestyle, and the number of years you expect to spend in retirement. Utilising tools like MoneyHelper’s Pension Calculator can assist in tailoring your contributions to meet your specific retirement goals.
The decision between a SIPP and an ISA depends on your individual circumstances, goals, and tax situation. A SIPP offers tax relief on contributions and the potential for tax-free growth, but withdrawals (excluding the initial 25% tax-free lump sum) are subject to income tax. An ISA, on the other hand, allows for tax-free growth and tax-free withdrawals, but contributions are made from after-tax income. For long-term retirement planning, a SIPP is often preferable due to the tax relief on contributions. However, if you require more flexible access to your savings, an ISA may be more suitable.
It’s important to note that you cannot withdraw money from a private pension, such as a SIPP, until you are at least 55 years old, with the minimum age increasing to 57 in 2028. This restriction may influence your decision based on when you expect to need access to your savings. An ISA, including a Lifetime ISA (with the exceptions mentioned earlier), generally offers more flexible access to your funds.
The State Pension is designed to provide a basic level of financial support during retirement, but it is generally not sufficient to maintain a comfortable lifestyle on its own. The amount you receive depends on your National Insurance contributions, and the full new State Pension currently stands at around £9627.80 per year or £185.15 per week (subject to change).
Relying solely on the State Pension may not cover all your expenses and may not provide the quality of life you desire in retirement. It is prudent to consider additional sources of retirement income, such as personal or workplace pensions, investments, and savings, to ensure a more comfortable and financially secure retirement. Planning and saving for your retirement early will give you more options and flexibility when you eventually decide to retire.
You can pay 100% of your earnings into a SIPP every year up to a maximum of £60,000. This £60,000 limit is your annual allowance, and any contribution above it will be taxed.
Yes, you can manage your own SIPP. That’s the whole point of a SIPP. SIPPs give you the flexibility to choose the specific investments that make up your pension portfolio. Depending on the pension provider you choose, you’ll have the option to select specific investments or choose from a range of ready-made portfolios.
10% of your annual gross income is a good pension contribution, but the more you save into your pension, the better.
Most financial advisers recommend saving at least 10% of your income before tax towards your retirement. 10% might seem like a lot, but remember that it includes tax relief from the government and employer contributions if your employer contributes.
When deciding how much to contribute, remember to consider how old you will be when you retire, your preferred retirement lifestyle, and the average number of years people spend in retirement. Have a play with MoneyHelper’s Pension Calculator to work out how changing your pension contributions at your age will affect your total retirement savings.
Here are the best pension providers in the UK:
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