Self Employed Pensions

A self-employed pension or SIPP offers a flexible way to prepare for retirement, allowing you to adjust your savings in response to changes in your cash flow and business profitability. Your investments can be allocated across shares, bonds, property, or cash, meaning the total amount you receive at retirement will depend on your contributions and the performance of these investments.

Book My Free Consultation

Find answers to your most pressing questions about our pension planning services and process. The information provided in these FAQs does not constitute professional financial advice. We strongly recommend that you consult a professional adviser before proceeding with a financial transaction.

What Is a self employed pension?

If you’re self-employed, establishing a personal pension is essential for your retirement savings, offering you the flexibility to make regular contributions or one-off payments. Your pension provider will automatically claim basic rate Income Tax relief, increasing your pension pot. Unlike employees who benefit from mandatory workplace pensions set up by their employers, self-employed individuals must take the initiative to secure their financial future. Unfortunately, many self-employed workers do not have a pension plan, which could lead to financial difficulties during retirement. Investing your savings in diverse assets, such as cash, fixed interest, shares, or property, can yield better results, especially when you allow your investments to grow over time.

What tax relief will I get on what I pay in to my pension?

You can benefit from Income Tax relief when you contribute to your pension, as your pension provider will automatically claim Basic Rate Income Tax Relief, enhancing your contributions by 20%. For instance, if you contribute £100 to your Personal Pension, an additional £25 will be added by the taxman, resulting in a gross contribution of £125 for every £100 paid. Higher and additional rate taxpayers may claim an extra 20% or 25% through their Self-Assessment Tax Return each year.

Beyond these primary Income Tax reliefs, if your Adjusted Net Income exceeds £100,000, you could attain a top tax relief rate of up to 60% as your pension contributions lower your Adjusted Net Income, gradually recovering your ‘lost’ Personal Allowance, which diminishes by £1 for every £2 earned over the threshold.

Also, if you’re a Higher Rate taxpayer with young children, you could be liable for the High Income Child Benefit Tax Charge, which reduces Child Benefit by 1% for every £100 earned above a Threshold Income of £60,000; however, contributing to a Personal Pension can lower your Threshold Income and help reclaim some of your Child Benefit.

Once your contributions are invested, they grow free from personal Income Tax and Capital Gains Tax. The amount you can contribute to your pension(s) is capped at the lower of your Relevant Earnings, with a minimum of £3,600 gross, and the Annual Allowance, which is set at £60,000 for the 2024/25 Tax Year. Keep in mind that if your Adjusted Income surpasses £260,000, your Annual Allowance is reduced by £1 for every £2 over that threshold, with a maximum reduction of £50,000; however, this restriction does not apply if your Threshold Income is below £200,000. It’s important to note that this tax treatment is contingent on your circumstances and is subject to future changes.

What happens when I retire?

When you reach the age of 55, or 57 starting in April 2028, you have three choices for your pension options: you can take your pension fund as a lump sum, use it to purchase an annuity that provides a guaranteed income, or take your pension commencement lump sum and transfer your savings into a flexible access drawdown plan, allowing you the flexibility to draw either a regular or variable income as needed.

What's the minimum retirement age for the self employed?

For self-employed people, the minimum State Pension Age aligns with the state pension age, which varies based on your date of birth, meaning it could be between 66 and 68 years old, depending on your circumstances. However, as a self-employed individual, you can decide when to retire and opt for early retirement if your financial situation allows it.

The minimum pension age for self employed pension savings is currently set at 55, but this is set to rise to 57 by 2028, meaning you’ll need to wait a bit longer before accessing your pension pot without facing penalties. Understanding this age threshold is crucial for planning your retirement effectively, as it impacts when you can start drawing your pension benefits and how much you can expect to receive. It’s important to carefully consider your pension savings, income needs, and lifestyle plans, and seeking tailored financial advice can help you navigate these options effectively to ensure a comfortable retirement. Always keep an eye on future changes and seek independent financial advice to navigate your pathway to retirement confidently.

Is there a maximum age beyond which I must retire?

Retirement is a personal journey, and there’s no one-size-fits-all answer to the question of the maximum age for retirement; it ultimately depends on your circumstances and aspirations. While some may choose to retire in their sixties, others find fulfilment in working well into their seventies or even beyond, mainly if they are passionate about their careers or wish to maintain their financial independence. The key is to evaluate your financial situation, health, and life goals, allowing you to make an informed decision that aligns with your unique needs and desires. With the proper guidance from a financial expert, you can explore all your options, ensuring that your retirement reflects your vision of success and happiness.

Get Expert Advice Today

Embark on your path to a brighter financial future with a complimentary consultation at Fintegrity. Our dedicated team specialises in personalised financial planning that demystifies complex issues, enabling you to make confident decisions. We are committed to your success. Reach out to us today.

Book My Free Consultation

A self-employed pension offers a flexible and tax-efficient approach to retirement savings, allowing you to contribute within certain limits while enjoying Income Tax relief at your highest marginal rate of up to 45%. Your contributions receive immediate basic-rate tax relief, enhancing your savings by at least 20%, and you can recover any additional higher-rate tax relief through your self-assessment tax return. Significantly, your investments grow tax-free. For those who are self-employed and may have irregular earnings, there is no requirement to save a fixed amount each month; you can contribute when it suits your financial situation. Starting your savings sooner rather than later is advisable, as your funds will be allocated across various assets such as cash, fixed interest, shares, and property, with longer investment periods typically leading to better returns. You can withdraw from your pension savings as early as 55 or 57 from 2028.

Book My Free Consultation

Why Choose Fintegrity

Our services are designed to provide peace of mind and financial security for you and your loved ones.

Personalised Approach

We tailor our strategies to meet your unique financial situation and goals.

Experienced Advisors

Our dedicated team comprises highly skilled professionals with a wealth of experience in financial planning.

Proactive Planning

We emphasise innovative strategies designed to enhance your investment performance while effectively reducing the burden of taxes.

Transparent Communication

We ensure clear and straightforward communication, keeping you informed every step of the way.

What Our Clients Say

Cath Addis 2 months ago

We have used Neil for pension and estate planning. He has always been very easy to talk to, explaining all the options very clearly. We couldn't be happier and trust him completely.

...

Chris Boddice 4 months ago

Neil has been very helpful in reorganising my finances and has given me confidence that I am making the right choices. Great at explaining options and implications and at asking questions that make you think hard about what you really want. Recommended.

...

Kay Cooper 6 months ago

Neil has been fantastic in helping me sort out a long-term financial plan. His knowledge and advice has allowed me to stop worrying about the future and actually make my money work harder for me. Highly recommend!

...

Peter Niven 6 months ago

I am due to retire in August this year, plus I came into a substantial legacy from my late mother, so I needed financial advice. He has met me several times and prepared a financial plan for me. I have complete trust in Neil and that is, of course, vital when dealing with large sums to be invested for one's retirement. In addition, he is easy to deal with, and explains quite complicated issues clearly and carefully. Altogether, he is a pleasure to work with and have 'on one's side'.

I am so grateful for everything, Neil (including the ongoing advice and support).

Peter

...

Rosamund Skinner 7 months ago

I was recommended to contact Neil Jenkins of Fintegrity IFA earlier this year, because I wanted financial advice and help to manage my financial affairs and my modest savings. I met with Neil twice and found him to be very friendly, approachable, professional and helpful. If I am honest I have little interest in finances but I do understand the need to make my money work for me, and Neil understood this and was very helpful. He listened to me and asked questions and made suggestions, then proposed a plan for my savings that met my requirements. He organised this for me very quickly and efficiently and continues to keep me updated. I feel I can trust him and know that he will respond if I have any queries.

...

Janine Deakins 7 months ago

My husband and I needed some impartial financial advice with regard to investing some funds following retirement. Neil took the time to establish our plans for future financial outgoings and to assess the level of risk we were willing to engage with. He explained our options clearly and without any pressure to proceed. We found Neil to be professional, friendly and knowledgable in his field and were confident to go ahead with his recommendation.

...

Henry Whelan 7 months ago

Neil was exceptional in helping me decide on life and illness insurance for me and my partner. He respected my specific needs and didn't stray from the brief. He was patient, knowledgeable, and ensured we got the right cover without overspending. Highly recommend!

...

Greg Power 7 months ago

Neil has been extremely helpful on a variety of financial matters, providing an expert and personalised service. Would highly recommend.

...

Megan Davidson 7 months ago

I was recommended Neil by my accountant to help me consolidate my multiple pensions and also give advise on where I would like to be when I retire.

To say the level of service is exceptional would be an understatement. Communication was clear and transparent all the way through with good help and advise and he was always quick to reply to emails or messages throughout the journey.

Would happily recommend to other businesses and people needed financial advice.

...

Rich Merritt 2 year ago

Absolutely recommend Fintegrity. Thorough process to understand our situation, and appropriate recommendations for our future financial goals.

...

Get Expert Advice Today

Book My Free Consultation

Expert financial planning advice is essential for securing your future in a world of financial change. Whether managing investments, planning for retirement, or providing financial security for your family, professional guidance can help you make informed decisions aligned with your goals, giving you the confidence to enjoy life, knowing your financial health is in capable hands.

0203 086 7043

hello@fintegrityifa.co.uk

The Workers’ League House, 44-50 Royal Parade Mews, Blackheath, London, SE3 0TN

Book My Free Consultation