What do I need to know about saving for retirement?

Last updated: 06 Jan 2021

Our three top considerations about saving for retirement if you are self-employed.

  • Has your engager used the deferral period?

Under the 2008 Pensions Act you may be designated as a ‘worker’ for auto-enrollment purposes. This requires your engager to enroll you into an automatic enrollment qualifying pension scheme.

The engager may choose to make use of a deferral period of up to three months before automatically enrolling you into their pension scheme, which is commonly NEST.

You can opt in to the scheme immediately. You just have to ask to be enrolled into the scheme. You will receive notification that the engager has used the deferral period which will provide information on how you can opt in.

  • Do you know what a Lifetime ISA (LISA) is?

LISA’s were introduced with the aim of encouraging saving for a first home or for retirement. There are restrictions on who can open a LISA, how much money can be contributed and when the money can be drawn. The Government adds a 25% bonus to your savings up to a maximum of £1,000 per year.

Members may wish to consider using a LISA to help save for retirement. You can find out more information here: https://www.gov.uk/lifetime-isa.

  • Have you considered opening a personal pension?

If you are self-employed you do not have an incentive to save for retirement from employer pension contributions. However this does not mean that opening a pension isn’t a good way to save for retirement. There are providers that would be able to offer a personal pension to you as a self-employed worker. Members may wish to consider setting up a personal pension to save for retirement.

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