It is becoming more and more appealing for individuals to ditch the typical 9 to 5 routine and opt for the self-employed route instead. Whether this means sole trading or working within your own Limited Company to contract/freelance, the idea of controlling your own decisions and destiny sounds more attractive in the long run.

A Gorilla Guide to Pensions for Contractors and Freelancers | Gorilla Accounting

One downfall to this style of work is that pensions become much more complicated. We have provided advice on how to handle your pension below:


Save little of your income very often – Income can be very unpredictable when you are self-employed. During some periods, you’ll be left tight with cash while awaiting payments from clients however, other months, you will be flooded with cash from customers. Due to this, contractors and freelancers will usually budget their income effectively and this should also apply to your pension. You should select a percentage of your income that you would like to save to contribute towards your pension and find a provider who will allow you to be flexible with the amount you are able to put into this.

Work out what you’ll need to save – Assuming you have paid off large payments, such as mortgages, it is predicted you will require around half of your current income in retirement. You can use useful pension calculators that will confirm how much you will be required to save each month to hit the target of money you want to save for your pension.

Begin saving now – According to recent surveys, only 47 out of every 100 self-employed men and 33% of self-employed women currently have pension savings. Strategies such as relying on properties and businesses you expect to have as well as just your state pension can be considered very risky as this does not guarantee the certainty that it will fund the standard of life you want.

Don’t forget the tax breaks – Despite not benefiting from an employer contributing to your pension scheme as you are self-employed, you still gain advantages yourself as you can receive tax relief. This means that for every £100 you put in from your post-tax income, the government will top up with £25 if you’re a basic rate tax payer.

Be aware of high fees – When you’re choosing your pension provider, you should check exactly how much you’re paying in fees and what service this includes to prevent paying any additional costs. This is because many providers will include hidden costs that they don’t want customers to know about. These can include set up charges, administration and change fees.

Here at Gorilla Accounting, our contractor specialist accountants will pass you over to our IFA (Independent Financial Advisor) regarding any queries you may have regarding pensions. This is included within our all-inclusive accountancy package which is just £85 + VAT per month and will provide you with your own dedicated accountant who will respond to any questions you may have if you contact before 3pm on any working day under our client service guarantee. To find out more get in touch on 0330 024 0406.