Saving into a pension if you are self employed

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If you are self employed, it’s easy to make excuses for not saving into a pension. You’ll likely be time-poor, have a ‘better’ use for your money or simply be so baffled by the jargon that you resign it to the ‘I’ll look at it tomorrow’ box.

You’re not alone! Figures from the Office of National Statistics say that there are around 4.8 million people in the UK who are self employed, and almost half (45.1%) of those aged between 35 and 55 have no private pension.

Saving into a pension if you’re self employed

But, whatever age you are and however boring it sounds(!), saving into a pension if you’re self employed is important.

We’ve looked at five companies that provide pensions if you are self employed: Aviva, Fidelity, NEST, Nutmeg and Standard Life. We’re not recommending these companies for your circumstances. We’ve chosen five companies that are well known and/or that we’ve specifically been asked to look at by SavvyWoman users. This is what we found:


Aviva offers a self invested personal pension (SIPP).

How to take out the pension

You can apply for an Aviva pension online in less than 15 minutes. Aviva will write to you once every year with a statement of the value of your savings to date, and a projection of the possible income in retirement these savings could provide. You can phone Aviva for an update or to manage your money. You can also do this online.

Investment funds

The Aviva SIPP has over 2,000 funds that you can invest in directly yourself of via a financial adviser. Some of these funds are managed by Aviva, some by other fund managers.

If this number seems overwhelming, Aviva also offers a sub-set “Select Range” of 70 funds, which it says represents good value for many savers. And if this still seems too many, it also offers four pre-designed fund options, which represent higher, medium and lower risk. You can change your investment decisions, start/stop or increase/decrease your contributions, whenever you wish and Aviva does not charge for this.

Alistair McQueen, Head of Savings and Retirement at Aviva, says its core range of four generic funds is popular with many people who take out a pension without the advice of an independent financial adviser.


If you have savings of up to £50,000, Aviva charges around 0.4% of the value of your savings each year to administer and protect your money. So, if you have £10,000 invested, it will charge you £40 each year. The more money you have invested, the lower the percentage charge. If you have over £500,000 invested, it typically charges you nothing.

Beyond its core charges, the funds you choose to invest in “may” carry an additional charge for investing your money. That charge is set by the fund manager, not Aviva.

SAVVY TIP: If you invest in an Aviva pension on the recommendation of a financial adviser, the adviser may charge additional ongoing charges. Obviously you don’t pay these charges if you choose to invest directly with Aviva.


Fidelity offers a SIPP.

Investment funds

Fidelity’s SIPP lets you invest in your choice of a wide range of funds, investments trusts and exchange-traded funds. There is no limit to how many funds you can hold.

How to take out the pension

To set up the SIPP you will need to fill out a paper form available on Fidelity’s website. Once set up, you can access your account online or via its phone teams.

If your SIPP is set up and you want to change contributions you can do this online or via the phone.

SAVVY TIP: If you have collected several different pensions over the years, some people may find combining their pensions easier to manage, as well as keeping an eye on costs. However, it’s not necessarily right for everyone – there may be good reasons for leaving your pension exactly where it is. If you transfer your pensions to Fidelity, it will pay any exit fees up to £500 per person.


Fidelity’s charges depend on how much you hold in your SIPP:

  • If you hold between £0 and £7,499.99, you will pay an annual service fee of £45 (that’s £3.75 a month) if you don’t have a monthly regular savings plan, or 0.35% if you have a monthly regular savings plan of £50 or over.
  • If you hold £7,500 to £249,999.99 you pay 0.35% service fee.
  • If you hold £250,000 to £1 million you pay 0.20% service fee and no further service fee is charged for assets held above £1 million.

Fidelity says there are no hidden fees and charges.

Need to know

Maike Currie, Investment Director at Fidelity International, told us that the most recent data (from May 2016) finds that the most popular funds are a good mix of actively managed funds and tracker funds, Fidelity funds and third party funds. The multi asset funds, where the fund asset allocation is taken care of by the fund manager, tend to be a popular choice for SIPPs.


NEST (National Employment Savings Trust) is the workplace pension scheme set up by the government in 2011 especially for auto enrolment. You can also usually join NEST if you’re self employed and it currently has more than 5,700 self employed members.

You can find out if you qualify by filling in the self employed checklist (opens as a PDF):

How to take out the pension

You sign up and manage your account online and can contact them via phone, live chat or send a secure online message. Phone lines and web chat services are available from 8am to 8pm Monday to Sunday and 10am to 4pm on bank holidays. NEST is closed on Christmas Day, Boxing Day, New Year’s Day, Easter Sunday and Easter Monday.

You’ll need to set up your own contributions, which you can do in your online account by Direct Debit or debit card. You can contribute as often as you like, as long as you add at least £10 each time.

SAVVY TIP: If you join NEST as a self employed person and later become employed, you can keep being a member. You can continue contributing to your retirement pot and if you start working for an employer that uses NEST, it can contribute to your existing retirement pot too.

Investment funds
When you join NEST, it will put your money into one of its NEST retirement date funds. It has a retirement date fund for every year a member could take its money out of NEST. Unless you tell them differently, it will assume you’ll take your money out of NEST when you reach 65 or your current State Pension age. For example, if you expect to take your money out in 2022, your retirement pot will be invested in the NEST 2022 Retirement Fund.

Each of these funds is managed according to the life stage of members in it. If you’re five years from retirement it will manage your money in one particular way, making sure it’s ready for you to take it out. If you’re 20 years from retirement, it will manage your money differently, focusing on growing it as much as possible.

If you have personal beliefs or ethical preferences about how NEST manages your money, or you want your money to be invested in a way that aims to grow it differently from the NEST retirement date funds, it offers a carefully selected choice of other funds.


NEST has a contribution charge of 1.8 per cent on each new contribution into a member’s retirement pot and an annual management charge (AMC) of 0.3 per cent on the total value of a member’s fund each year.

SAVVY TIP: The upfront charge of 1.8 per cent means NEST can be expensive if you take out a NEST pension with only a few years until you retire. However, the annual management charge of 0.3% is cheaper than a number of pension providers.

So, if you paid £10,000 into your pension pot at the start of the year, the contribution charge would be £180 and, you’d pay an AMC of £30 a year.

NEST don’t charge for switching your fund, changing your retirement date, transferring your pot or any other services.

Need to know

NEST produces a regular quarterly report, which contains all the information on fund performance. You can find the report on its website.


Nutmeg, the online investment management company, offers a personal pension.

How to take out the pension

You can start or transfer a pension to Nutmeg online. And then monitor your investments on the move via its iOS and Android apps. You can change your contributions by logging in to the online dashboard. Here, you can also change your risk-profile.

Investment funds

It has a range of ten risk-profiled, globally diversified, fully managed portfolios. The portfolios are actively managed by its expert investment team and regularly rebalanced. It invests in high-quality, low-cost exchange traded funds.

Nutmeg also offers a fixed allocation portfolio, which is designed by its team for the long term. Your portfolio is automatically rebalanced to stay in line with your chosen risk level. Rebalancing means that some investments will be sold from time to time so your pension doesn’t end up owning a lot of one type of asset, such as shares or bonds.


For a fully managed portfolio Nutmeg levies the following charges:

  • 75% if you hold up to £100,000 and
  • 35% if you hold beyond £100,000

There’s also a 0.21% average investment fund cost per year and 0.09% average effect of market spread per year.

So, if you invested £10,000, the estimated cost of investing over 12 months, assuming returns of 0%, would be £105.

If you have a fixed allocation portfolio with Nutmeg, the charges are:

  • 45% if you hold up to £100,000 and
  • 25% if you hold beyond £100,000.

The other charges remain the same.

So, if you invested £10,000, the estimated cost of investing over 12 months, assuming returns of 0%, would be £75.

SAVVY TIP: The amount of risk that you are willing to take with your investments will be specific to your own circumstances. So, if you are further away from your investment goal, for example if you are in your 30s investing for a retirement date that might be 30 years in the future, you may feel more comfortable taking more risk than someone investing for a goal just five years away.

Need to know

The majority of Nutmeg’s pension customers (61%) are invested in its higher risk portfolios, with 37% invested in medium risk portfolios and 2% invested in low risk portfolios. (Source: Nutmeg April 2018)

Standard Life

Standard Life offers a personal pension and a SIPP. Standard Life merged with Aberdeen Asset Management in August 2017.

How to take out the pension

You can set up a Standard Life Active Money Personal Pension plan or SIPP online or over the phone. If you register online, you can manage most aspects of your plan via the Customer Dashboard, including your contribution levels and investment instructions.

Investment funds

Standard Life has a wide range of around 300 funds covering different asset classes as well as multi-asset and managed funds. You can select from funds provided by Standard Life as well as a number of other well-known asset managers.

You can change your contribution levels at any time, and single or one-off payments can be made online or over the phone. You can also set up a direct debit if you would like to make regular contributions (subject to security checks).

Need to know

It offers a flagship MyFolio Managed range of risk profiles. These are actively managed by experts who invest in a range of asset classes across the globe with the aim of getting the best possible return for the level of risk you are comfortable with. There are five different risk profiles to choose from and MyFolio Managed III risk profile is the most popular.

If you want to understand more about the level of investment risk you are comfortable with, you can complete an online independent risk questionnaire.

You can also build and manage your own portfolio.


The charges depend on the funds you select. These are set out in Standard Life’s charges guide, which includes a comprehensive list of all available funds and investment options. You can find out more about the charges here.

For SIPP customers, initial setup is free and there is no extra charge for transferring a pension. If you want to transfer other pension pots, there is a minimum amount required if you don’t already have a SIPP. But if you do already have one then there is no minimum requirement.

Standard Life offers discounts to charges for all customers with more than £25,000 invested, these start at 0.3% and rise to 0.5% for people with more than £500,000 in their pension.

A typical customer (with investments in excess of £25,000) will pay around 1 – 1.15% per annum (based on the MyFolio III Managed Pension Fund).

SAVVY TIP: Standard Life told us that people choosing the MyFolio Managed III Universal Strategic Lifestyle Profile invest in the MyFolio Managed III Pension Fund during the accumulation phase. This grew in value by 35.02% after all charges in the five years to the end of April 2018. Customers who are willing to take more risk and choose the MyFolio Managed V risk profile, which invests in the MyFolio Managed V Pension Fund, would have seen an increase in their life savings of 50.43% after all charges. As ever, past performance isn’t a guide to future returns!

Related articles:

How to avoid retiring on £23 a day

Pension contributions increase for automatic enrolment pensions

Understanding pensions automatic enrolment and decisions you’ll have to make

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