If you are self-employed, no employer will set up a pension for you or contribute to it. A Self-Invested Personal Pension (SIPP) is the most widely used solution: you control the contributions, the investments, and the timing. The right SIPP for a self-employed person is not necessarily the same as for an employed investor — flexibility and low costs on smaller or irregularly-funded pots matter more.
In 2026/27, you can contribute up to £60,000 or 100% of your earnings (whichever is lower) and receive income tax relief on every pound.
What Self-Employed People Need from a SIPP
| Requirement | Why it matters for self-employed |
|---|---|
| No minimum monthly contribution | Income varies — you need to contribute when cash flow allows |
| Lump sum flexibility | Year-end contributions once profits are known |
| Low costs on smaller pots | Many sole traders start with modest amounts; high percentage fees on £20k–£50k pots bite hard |
| Relief at source | Tax relief added automatically — you claim extra via self-assessment |
| Simple investment options | Not everyone wants to pick individual stocks |
| Good mobile app | Sole traders often manage everything digitally |
SIPP Provider Comparison for Self-Employed
| Provider | Annual fee | Fund charges (typical) | Minimum contribution | Best for |
|---|---|---|---|---|
| Vanguard | 0.15% (capped £375/yr) | 0.06–0.22% | £100 lump sum or £25/month | Low-cost index investing; larger pots |
| PensionBee | 0.25–0.95% | Included in fee | No minimum | Simplicity; irregular contributors |
| AJ Bell | 0.25% (capped £3.50/month on shares) | 0.10–0.25% ETFs | £25/month or £500 lump sum | DIY investors; mid-size pots |
| Freetrade | £9.99/month (SIPP) | 0% on own ETFs | No minimum | Low-cost investing; smaller pots |
| Hargreaves Lansdown | 0.45% (capped £45/month) | Varies | No minimum | Wide fund range; established provider |
| Interactive Investor | £9.99–£19.99/month | £0 trades on own list | No minimum | Large pots; flat-fee advantage |
| Nest | 1.8% on contributions + 0.3% on pot | Included | No minimum | Very simple; basic default fund |
Cost Comparison by Pot Size — Annual Charges (Platform Fee + Typical Fund Costs)
| Pot size | Vanguard | PensionBee (0.50% plan) | AJ Bell | Freetrade | HL |
|---|---|---|---|---|---|
| £10,000 | £22 | £50 | £37 | £120 | £57 |
| £30,000 | £66 | £150 | £87 | £120 | £171 |
| £60,000 | £132 | £300 | £162 | £120 | £342 |
| £100,000 | £221 | £500 | £262 | £240 | £510 |
| £200,000 | £375* | £1,000 | £387 | £240 | £630* |
*Capped. Freetrade: £9.99/month = £120/year flat for SIPP regardless of pot size. HL capped at £45/month = £540/year on equities.
Crossover points:
- Vanguard beats HL above approximately £19,000 (HL’s cap doesn’t apply at small pots)
- Freetrade’s flat fee becomes competitive above approximately £40,000
- Interactive Investor’s flat fee (£9.99–19.99/month) becomes competitive above £80,000–100,000
How Tax Relief Works — Self-Employed Example
Tom is a sole trader. Net profit: £42,000 (2026/27). Basic rate taxpayer.
Tom wants to contribute £6,000 gross to his SIPP:
- He pays in £4,800 net (post-tax income)
- The SIPP provider claims £1,200 basic rate relief from HMRC
- Total in his pension: £6,000
- On his self-assessment return, he declares the gross contribution — this reduces his adjusted net income by £6,000, potentially lowering his tax bill further if he is near a threshold
Karen is a freelance consultant. Net profit: £65,000. Higher-rate taxpayer on the portion above £50,270.
Karen contributes £10,000 gross:
- She pays in £8,000 net
- Provider claims £2,000 basic rate relief → £10,000 in pension
- Via self-assessment, Karen claims a further 20% on the gross contribution: 20% × £10,000 = £2,000 additional tax relief (either as a refund or reduced tax bill)
- Effective net cost to Karen: £6,000 for £10,000 in her pension
Carry Forward — Catching Up on Missed Contributions
If you had low income years, you can carry forward unused annual allowance from the previous three tax years (provided you had a pension open in those years).
In 2026/27 you can use:
- 2023/24 allowance: £60,000
- 2024/25 allowance: £60,000
- 2025/26 allowance: £60,000
- Plus 2026/27 allowance: £60,000
Maximum possible in 2026/27 using carry forward: £240,000 (subject to 100% of current year earnings cap)
This is powerful for self-employed people who had a very good year after several lean years.
When to Choose Which SIPP
Choose Vanguard if: You want the lowest ongoing cost, are comfortable choosing between a small range of index funds, and your pot is growing towards £50,000+.
Choose PensionBee if: You want to combine old workplace pensions into one place, prefer a single managed fund, and value simplicity over optimising every basis point of cost.
Choose Freetrade if: Your pot is under £40,000 and you want a flat fee with access to ETFs. Note: the SIPP charge applies even if you have a small pot, so avoid if you are just starting with very small amounts.
Choose AJ Bell if: You want a mid-range DIY option with a broader fund range than Vanguard and lower costs than HL.
Avoid Interactive Investor’s flat fee unless your pot exceeds £80,000, at which point the monthly fee becomes proportionately cheap.
For the full guide on how SIPPs work for self-employed people, see SIPPs for sole traders. To compare SIPPs against workplace pensions, see SIPP vs workplace pension. For all SIPP providers including those better suited to employed investors, see best SIPP providers UK 2026.