Pension planning for the self-employed

Introduction

A pension gives you a retirement income, paid for by investments built up during your working life. The State Pension is funded by your National Insurance contributions but only provides a basic income. You may need an additional pension to retire comfortably.

As a self-employed person, you cannot join an employer's pension scheme and do not qualify for the additional State Pension, also known as the State Second Pension (formerly SERPS). However, you can take out another type of private pension such as a personal pension or a stakeholder pension. The amount you get at retirement depends upon how much money has been paid in, how well it has been invested and the age at which you decide to retire.

It is important that you consider all your options before making a decision. This guide helps explain how pensions work and what you need to do to find one that suits your needs.

Subjects covered in this guide

• Introduction
• Assessing your pension needs
• How a personal pension works
• The basic State Pension
• Stakeholder pension
• The difference between a stakeholder pension plan and a personal pension plan
• Other pension products
• Other tax-efficient savings
• Transferring your pension
• Keeping track of your pension