6 ways to save for retirement without a workplace pension

Around 82% of self-employed workers aren't saving into a pension, according to new research from Nest. 

Nest, the government-backed pension provider that was set up to support auto-enrolment, carried out the research in partnership with the Department for Work and Pensions (DWP). It found that just 18% of self-employed workers are actively saving, while 75% said they want to put money aside for retirement.

Here, Which? explores why so few are saving, what pension options exist for the self-employed and how much you might need to retire.

Why are self-employed workers not saving?

Just 18% of the UK’s 4.4 million self-employed workers are currently contributing to a pension, according to Nest.

Common reasons include the cost of living, fluctuating income and a lack of time or knowledge about how to set one up. 

The number of self-employed savers has dropped significantly over the past 30 years. In 1998, around 60% of self-employed workers earning at least £10,000 a year paid into a pension. That’s a 42 percentage point drop compared with today.

By contrast, 90% of eligible employees were saving into a workplace pension in 2024.

If you're self-employed, you're not automatically enrolled into a workplace pension and you don’t get employer contributions. Unless you set one up yourself, you could reach retirement without any savings in place.

The government has acknowledged this gap and is working with providers to increase pension participation among the self-employed.

• Find out more: best pension drawdown providers 2025.

Pension options for self-employed workers

If you’re self-employed, you won’t have access to a workplace scheme, but there are still a few ways to save:

Self-invested personal pension

This is a form of defined-contribution personal pension that allows you to choose and manage your own investments, such as shares, funds and exchange-traded funds (ETFs). As it comes with more choices, they often come with higher fees.

• Find out more: best self-invested personal pension (Sipp) providers 2025.

Personal pension

With a personal pension, you pay regular monthly amounts or a lump sum to a pension provider, which invests it on your behalf depending on your level of risk. These often have a limited range of investment options compared with a self-invested personal pension (Sipp).

Lifetime Isa

You can open a Lisa from 18 to 49, and the savings you put into it are topped up by a 25% bonus from the government. You can put in £4,000 a year and get up to £1,000 through the bonus. 

You can only withdraw the cash for your pension or first property, or you face a 25% penalty.

• Find out more: best lifetime Isas 2025.

How much do you need to save in a pension? 

The Pensions and Lifetime Savings Association (PLSA) outlines three ‘retirement living standards’ – minimum, moderate and comfortable. 

These figures show how much you’d need to spend annually to meet each standard: 

• Find out more: how much will I need to retire?

6 ways to save for retirement when you're self-employed

If you’re self-employed and haven’t started saving for retirement, there are practical steps you can take, whether you're starting from scratch or building on what you've already got.

1. Start contributing

It’s never too late to start saving for your pension. The first step is to set one up and start making regular payments. You can automate these via direct debit or contribute manually on a schedule that works for you. 

Some pensions are more flexible than others and allow you to pay in a lump sum as and when you can, which might better suit people whose income varies from month to month.

• Find out more: how long does my pension need to last?

2. Make the most of tax relief 

One of the biggest benefits of pension saving is tax relief. Regardless of employment status, everyone qualifies: 

• If you're a basic-rate taxpayer, you get 20% tax relief. So if you want to contribute £100 to your pension, you only need to pay in £80. Your provider claims the remaining £20 from the government and adds it to your pot automatically.
• If you're a higher-rate taxpayer, you’re entitled to 40% tax relief in total. Your provider still claims 20%, but you can claim back the other 20% through your self-assessment tax return. That means while £100 goes into your pension, you can reclaim £20 from HMRC.
• If you're an additional-rate taxpayer, you can claim 45% tax relief overall. Your provider claims the first 20%, and you claim back the remaining 25% through your tax return. So for a £100 pension contribution, you can reclaim £25.

You can contribute up to £60,000 a year (or your total earnings – whichever is lower) and still receive tax relief. 

If you have no earnings, the annual cap is £3,600. You can also carry forward unused allowance from the previous three tax years. 

• Find out more: calculate pension tax relief.

3. Trace lost pensions

If you were previously employed, you might already have one or more pension pots you’ve forgotten about. According to the Pensions Policy Institute, there are more than three million lost pension pots in the UK.

Contact your former employer for details or use the government's Free Pension Tracing Service to search for lost pensions by employer name or provider. 

This could give your retirement savings an unexpected boost or save you from starting from scratch. 

• Find out more: how to find old pensions.

4. Consolidate your pensions 

If you have several small pensions from previous jobs, you may want to combine them into one. This can make it easier to manage your retirement savings and keep track of fees and performance.

Some providers offer lower charges or better investment options than others. Consolidating could help maximise returns, but be sure to check for any exit penalties or valuable guarantees before transferring

• Find out more: should I combine my pensions?

5. Pay through your limited company

If you run a limited company, you can make pension contributions directly from your business as an employer, including on your own behalf as a director.

These contributions count as a business expense, which reduces your company’s taxable profits and can lower your corporation tax bill. 

They also aren’t subject to income tax or National Insurance, unlike salary or dividends.

You won’t receive personal tax relief in the usual way, as your company makes the contribution. However, the full amount still goes into your pension and your business gets the tax benefit.

6. Choose the right provider

There are several pension providers to choose from, including big names such as Aviva and Scottish Widows, and investment platforms such as AJ Bell, Hargreaves Lansdown and Interactive Investor.

• Fees and charges These can eat into your pot over time
• Investment choice From ready-made portfolios to DIY funds
• Customer reviews and support For peace of mind
• Ease of use Especially if you want to manage your pension via app

Find out more: do you know where your pension is invested?