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Securing your future: Retirement saving options for the self-employed

This piece explores the reasons behind lower pension savings amongst the self-employed, alternative savings options and the ongoing policy reform efforts to improve retirement outcomes for the sector.

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Chase de Vere
18 Sep 2025
3 minutes
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Retirement may feel far off, yet for self-employed professionals, the journey to a comfortable later life can be uncertain. With no employer to automatically enrol you into a workplace pension, many self-employed people struggle to save adequately. Recent findings show only around 18% of self-employed individuals are actively saving into a pension – compared to 88% of employees – leaving thousands at risk of financial strain in retirement.

The current state: Why self-employed savers are being left behind

  • Low participation rates: IPSE research indicates just 31% of self-employed people pay into a pension, with only 33% using ISAs and a mere 2% opting for Lifetime ISAs.
  • Savings shortfalls: Nearly 40% of self-employed people are not saving enough for retirement – or not saving anything at all.
  • Structural disadvantage: Without the safety net of auto-enrolment or employer contributions, self-employment comes with irregular incomes and numerous competing financial priorities.

Why pensions still offer real value

Pensions remain one of the most tax-efficient ways to save for the long term. Tax relief provides significant advantages, and investing through vehicles like SIPPs (Self-Invested Personal Pensions) offers broad investment flexibility and favourable tax treatment.

Practical alternatives and buffers

For those seeking more flexibility, ISAs, especially Lifetime ISAs, offer accessible savings – though typically without the same tax efficiency as pensions. IPSE has even campaigned for innovative solutions like “sidecar” pension models that combine emergency savings with long-term contributions. 

Hope on the horizon: Reform and renewed focus

The UK government has re-launched its Pensions Commission to address the nationwide savings crisis. Its remit includes exploring expansion of auto-enrolment to the self-employed, boosting contribution levels, and potentially integrating saving prompts into the tax system. Additionally, a broad review of pension policy is underway, with potential reforms such as reducing Lifetime ISA exit penalties and improving access for the self-employed. 

For more information on what the Pensions Commission means for the self-employed and IPSE’s campaigning in this area, you can read more here.

What you can do now: Steps to take control

  1. Start small and regular – Even modest monthly contributions – such as £50 – can build momentum, particularly if set to increase annually.
  2. Choose a pension that suits your needs – Consider SIPPs for flexibility, personal pensions for simplicity, or ISAs as supplementary vehicles.
  3. Seek advice you can trust – Professional guidance can help you navigate product choice, tax implications, and contribution strategies with confidence. Make a start today by reading IPSE’s guidance on retirement planning here.

Final thoughts

For the self-employed, saving for retirement can feel daunting - but it’s far from impossible. A combination of small, consistent contributions, the right savings vehicles, and timely professional advice can make all the difference. With the right support, you can build a secure future - on your terms.

The information contained within this article is for guidance only and does not constitute financial advice.

The value of investments may go down as well as up and you might not get back as much as you originally invested.

A pension is a long-term investment. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

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