Self-employed and no pension? Read our essential guide to getting started!

This blog is specifically written to help self-employed professionals navigate the world of pensions.

What is a pension?

It’s a savings pot you pay money into, usually every month,  to build a lump sum of income for when you retire or start to work less.  You will receive tax relief on the money invested into a pension however you cannot access funds until much later in your life.  Currently this is at age 55, but for those aged 40 or under, they will not be able to take advantage of the pension’s freedoms until at least age 58, rather than the current pension age of 55. The ‘private pension age’ will rise from 55 to 57 in 2028 and will then be linked 10 years below the state pension age, which is already due to be linked to longevity. Those aged in their early twenties will not be eligible for state payments until age 70, under the plans, which will mean no access to their private savings until age 60.

“What is my State Pension age?” I hear you say! You can find out here -https://www.gov.uk/state-pension-age

What type of pension should I get?

There are many different types of pensions, and they mostly all work the same way. Most self-employed people use a Personal Pension for their pension savings.

There’s lots to think about when looking into starting a pension, but the most important thing to do is just get started!

My 7 top tips if you are doing it yourself would be:

1. Pay off high-interest debts first, particularly credit cards, store cards.
2. Build up an emergency fund of 1-3 month’s income minimum.
3. Get the right protection in place.
4. Budget so you know exactly how much you can afford to put into your pension pot.
5. Start early and invest as much as you reasonably can.
6. Look for a simple, low-cost, globally diversified portfolio and control your fees.
7. Educate yourself on investment risk and the impact of your behaviours.

To read our free full guide on how to get started on your pensions journey,  email ian@worktolivefinancialplanning.com