Self-employed? a guide to pensions

Read on and understand the process of saving into a pension if you’re self-employed.

09:53 12 June 2013

One of the perks that self-employed individuals get to enjoy is that they don’t have a boss. There’s nobody to tell them what to do, what time to report for work, etc. However, this could be a huge disadvantage when talking about pensions.

Workplace schemes are definitely a convenient way for workers to start contributing to a pension and in most cases, employers do contribute too.

However, there is no need to worry. Self-employed individuals can start contributing to pension and build retirement fund easily. All it takes is determination and a little discipline.

Start by choosing the right kind of pension for you. Depending on your goals, you can set up SIPP, stakeholder pension, and personal pension. Each pension offers different advantages. So, carefully understand each before you make a decision.

Next step is to start contributing into pension. Put as much money as you can in there. Also, start as early as possible. You are more likely to build a fund that is big enough to afford you with comfortable retirement if you start contributing to pension at the age of 20 to 25.

Lastly, prioritize your contributions. List down all your monthly expenses and make sure that your contribution are on top of your list.