Midlife Pension Review for self-employed people

Are you self-employed and not sure how to deal with your pension, or feel a bit lost when it comes to retirement planning? Then our dedicated appointment service, called Midlife Pension Review, can help you with what this means for you and your pension. It covers four areas: work, health, family, and money. In these topics we’ll help you think about how they affect your pension, and what the best course of action for you might be. 

About our free Midlife Pension Review appointment

Being self-employed means you’re responsible for the success of your business. The pensions side of things might’ve slipped through the net. After all, it can be complicated at times.

But our Midlife Pension Review appointment will give you impartial and independent guidance which can make pensions much easier to manage.

Our service gives you the opportunity to talk through your situation with one of our pension specialists. They’ll help to guide you through your options.  

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When emailing, please provide your name and contact email address – so we can contact you to arrange an appointment.

We aim to contact you within five working days. If you don’t get a confirmation email it’s worth checking your spam or junk mail folder. 

What will the appointment cover?

The appointment will cover and explain:

  • the pension options available to you
  • what you’ll need to think about and the things you’ll need to ask
  • we’ll cover four main areas: work, health, family and money; you can get an idea of the sort of things covered below
  • your next steps, signposting to helpful organisations, should you need them.

You and your work

Perhaps your business itself is your retirement plan and will provide a sufficient capital sum and/or income stream in retirement.

But it might also be that your business’s value drops significantly following your retirement. You might want to ask yourself: do you have an exit strategy from your business? Or might the time come when you would benefit from re-skilling?

Key points to think about

Here's some starting points to think about.

Try paying into a pension in the place of some of your salary

By paying into a pension, you can receive income tax relief at the basic, higher and even additional rate depending on your income.

Compared to paying a salary, you also don't pay National Insurance on pension contributions either to yourself or staff.

Think about corporation tax

If your business is a company, employer pension contributions (those paid from the business to staff, including directors) are also deductible for corporation tax purposes.

Pension contribution amounts can be flexible

If you feel your business may not be able to commit to a regular pension contribution, many providers will allow you to pay contributions as and when you want to.

You might take your pension and keep working

From the age of 55 many providers will also allow you to begin taking money from your pension flexibly - including up to a quarter (25%) as tax-free lump sum - which could help you phase into retirement.

Explore the different pension options

Different types of pension can have different features. A Self-Invested Personal Pension (SIPP) can hold commercial property. A Small Self-Administered Scheme (SSAS) can also hold commercial property and can make loans back to the business. If you like the sound of these options, you might want to speak to a financial adviser.

You and your health

Even if you’re fit and healthy now, this may change in the future. It’s worth asking yourself what your lifestyle’s like and whether you need to make changes.

It is also worth making sure that you’ve got plans in place for your family and your business if something happens to you out of the blue.

Key points to think about

Have a plan in case you get sick

Being self-employed means that, unlike many people who are employed, there is no sick pay or cover when you're unable to work. By having a rainy-day fund and certain kinds of insurance (for example, income protection and critical illness cover), you can help protect yourself and your family.

Remember a pension can be taken early if you suffer ill health

Pensions can often be taken early on the basis of ill health. This can work in different ways for different types of scheme, so it's best to check with your provider what their procedure is and call our helpline if you feel that you would benefit from a conversation with an impartial expert.

Your pension might go to a dependant if you died

Should the worst happen, pension schemes can provide benefits to any dependants on your death, and in the unfortunate event of death before the age of 75, any money can usually be paid out tax free.

You and your family

If your family circumstances change it can be a good time to review your finances to see if they fit well with your new situation.

Finances mean your pensions too, so don’t overlook them. It’s also worth checking you’re on track with your retirement plans and understand what any changes mean for you and your savings.

Key points to think about

Take stock financially if you’re getting married or entering a civil partnership

Getting married or entering a civil partnership can dramatically change the amount of income coming into your household and the way the income is spent. It’s possible that your spouse/civil partner is employed while you are self-employed for instance, which might provide opportunities for you to make savings as a couple.

If you’re having kids, look at your financial goals too

Having children will also change your household expenditure and it may affect your household income if you or a partner or both reduce hours to take on child caring responsibilities. Your financial goals are also likely to change as you think to the future for your family.

Should a relationship change, your finances will always need looking at

Relationships can also change. People can separate or get a divorce/dissolution. Lots of people are unaware that their pension arrangements will be included in any divorce financial settlement and that, depending on the option they choose to divide up their assets, there might be implications should they get re-married in the future.

You and your money

Think about setting income goals both for now and in retirement. These can act as the main building blocks of your financial plan.

Key points to think about

The State Pension

The full New State Pension is £179.60 per week (£9,339.20 per year) in the tax year 2021/22 based on 35 years of National Insurance Contributions. It is a guaranteed income for life which rises each year with inflation.

Find all your pensions

Making sure you know where all your pensions are and what they're worth is a great first step to beginning retirement planning.

Set a retirement income goal

Setting a retirement income goal - taking into account the State Pension, any personal or workplace pensions you’ve built up as well as any other savings, investments and assets, can then help you see how close you are.

Deal with any debts

Getting to grips with any debts and establishing a rainy-day fund can make any quieter periods for your business periods easier to manage.

Don’t forget about tax relief when it comes to pensions

If you make contributions in a personal capacity pensions provide tax relief to boost your savings. When you pay £80 from your bank account, your provider can claim £20 from HMRC to give you £100 in your pension.

Paying into a pension can reduce your tax bill

If you’re a higher rate taxpayer or have your own company, paying a pension contribution could also reduce your tax bill.

You could begin taking money from your pension from age 55

From the age of 55, you can normally begin taking money from any pensions you've set up yourself. This includes being able to take up to a quarter (25%) of your pension as a tax-free cash lump sum and the flexibility to take further lump sums or income that are taxable if and when you need to.  This might help you top up your income or allow you to begin cutting down on your work slightly and phase your retirement if you wish to.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
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