Self-Employed? Why your pension shouldn’t be left until “later”

When you’re self-employed, it’s easy for retirement planning to slip down the priority list.

There’s always something more immediate competing for your attention. Clients to look after, invoices to chase, tax returns to file, rising business costs to manage. For many business owners and freelancers, pensions become one of those things you’ll “sort out eventually”.

But unlike employees, there’s no workplace pension quietly ticking along in the background. If you’re self-employed, your retirement future is largely in your own hands.

And while the State Pension can provide a foundation, it’s unlikely to deliver the level of comfort or flexibility most people hope for later in life.

The cost of waiting

One of the biggest misconceptions around pensions is that you need large amounts of spare income to get started.

In reality, time is often far more valuable than the size of the contribution itself.

Starting earlier gives your pension more opportunity to benefit from long-term investment growth and compound returns. Even relatively modest monthly contributions made consistently over time can build into something significant.

Delaying by five or ten years can make catching up much more difficult and often far more expensive.

Why self-employed people often fall behind

Research consistently shows that self-employed workers are far less likely to contribute to a pension than employees.

Part of this is practical. Without automatic enrolment, contributions rely entirely on personal discipline and forward planning. Income can also fluctuate from month to month, making long-term commitments feel harder to manage.

But there’s also a psychological side to it. When retirement feels decades away, it’s tempting to focus only on today’s priorities.

The problem is that retirement has a habit of arriving much faster than expected.

Flexibility may be greater than you think

Many people assume pensions are rigid or inaccessible, but modern pension planning can often be much more flexible than expected.

Contributions can usually be adjusted as income changes, making pensions suitable even for those with variable earnings. During stronger business periods, it may be possible to increase contributions, while quieter periods may require a temporary reduction.

There can also be valuable tax advantages associated with pension contributions, helping make retirement saving more efficient.

The sooner you start, the more options you create

Retirement planning is not simply about stopping work one day.

For many self-employed people, it’s about creating future choice and financial independence. That could mean:

• Reducing working hours later in life

• Stepping back from day-to-day business pressures

• Supporting family financially

• Travelling more

• Maintaining your current lifestyle without relying solely on continued income

The earlier you begin building retirement savings, the more flexibility and control you are likely to have in the future.

Small steps today can make a big difference

Putting a pension in place does not need to be overwhelming.

Often, the most important step is simply getting started with a plan that works around your circumstances today and can evolve over time as your income and goals change.

If you’re self-employed and haven’t reviewed your retirement planning recently, now could be a good time to start the conversation.

The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Folan Brookes Financial Consultants Ltd an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by the Openwork Partnership 20/05/2026