There are more than 4.5 million self-employed people in the UK, and only 18 per cent of them are contributing to a pension.
Thousands of people join the ranks of the self-employed each year, but many are wary of saving for their future. Seven out of ten people do not understand the tax breaks they provide and are confused about the advantages of contributing to pensions. As self-employed incomes fluctuate, they are not aware that the pension’s contributions can be flexible.
Employers pay toward their employees’ pension, which is not the case if you’re self-employed. If you’re a basic taxpayer, however, for every £100 you contribute to a pension, the provider will claim £25 from HMRC and this will go into your pension pot.