Stakeholder Pensions for the Self-Employed

The self-employed are very much a target group for wider stakeholder pension take-up.

Many self-employed people will not receive the State Second Pension, which acts as a top-up to supplement basic state provision.


Unlike people paid by Pay As You Earn (PAYE), self-employed people do not receive instant tax relief on their pension contributions; instead the relief is returned into the pension after they have completed – and the Inland Revenue has approved – their end-of-year tax return.

The tax relief is certainly worth taking advantage of. For more information about the tax advantages of stakeholder pensions see our Tax Guide.

Stakeholder pension contributions can be stopped and started at any time, as well as increased or cut, depending on your circumstances – this flexibility often ideally suits the self-employed.

Some pensions for self-employed people may also offer sickness protection built into a pension, which may worth be considering (the cost is usually around 5 percent extra of the total premium).