Question 1

How much can a self-employed person pay into a pension?

Accepted Answer

You can contribute up to the lower of £60,000 or 100% of your relevant UK earnings in a tax year and receive tax relief. This is the annual allowance for 2025/26. If you earn £30,000, your allowance is £30,000 — not £60,000. You can also carry forward unused allowance from the previous three tax years.

Question 2

Do self-employed people get tax relief on pension contributions?

Accepted Answer

Yes. Self-employed people get the same income tax relief as employees. Your SIPP provider claims 20% basic rate relief automatically. If you’re a higher rate (40%) or additional rate (45%) taxpayer, you claim the extra relief through your self-assessment tax return. There is no employer contribution or salary sacrifice option for the self-employed.

Question 3

What is the best pension for a self-employed person in the UK?

Accepted Answer

Most self-employed people use a SIPP (Self-Invested Personal Pension), which offers flexibility over investment choices and contribution levels. Unlike employed workers, you are not auto-enrolled and receive no employer contributions — every pound comes from you. Popular low-cost SIPP providers include Vanguard, Interactive Investor, and AJ Bell. The best choice depends on your pot size and investment preferences — consider speaking to an FCA-regulated adviser.

Question 4

Does Class 2 or Class 4 National Insurance count toward state pension?

Accepted Answer

Only Class 2 NI counts toward your state pension qualifying years. In 2025/26, Class 2 NI is £3.45 per week. You need 35 qualifying years for the full new state pension. Class 4 NI (9% on profits between £12,570 and £50,270) does not count toward state pension entitlement — it’s purely a tax on self-employment profits.

How much should you put into your SIPP?