Self Employed Pension

Yes you can, as a self employed person you have the same tax allowances as an employed person. If you are an employee of your own company, you may be able to make employer contributions into your personal pension. You can speak to the investment adviser team for more details, and we recommend for tax queries in respect of pension contributions and your business, you speak to a qualified advisor , accountant or to the Department for Work & Pensions.

Yes, for most people this will be possible. You can register your employer by filling out the attached form and returning it to support@moneyfarm.com to start the process. Please contact our investment adviser team if you want to know more.

There’s a cap on how much you can contribute to your pension to receive tax relief each year. In the 2023/24 tax year, this limit is £60,000 or your annual salary – whichever is lower. The government applies a tax charge, called the annual allowance tax charge, if the total contributions to your pension savings for a given tax year exceed your annual allowance. Your ‘total contributions’ includes all your personal contributions, any income tax relief from the government and contributions paid by your employer. The charge for exceeding your annual allowance is set at your marginal rate of income tax. This acts as if the excess amount were added to your other earnings. Before you start withdrawing from your pension savings, you can usually carry forward up to three years of unused allowance. This increases your available allowance. Once you start taking income benefits from your pension savings, you will normally be subject to what’s called the Money Purchase Annual Allowance restricting the level of your contributions to “money purchase” pensions, including your Moneyfarm Pension. If you are unsure of your annual allowance we recommend you seek professional advice.

When it comes to saving for your future, the more you can put aside the better to ensure your financial security. It all depends on the standard of living you’re expecting when you retire. Visit our Pension Calculator and Decodes blog to find out what this means for you.

A Self Invested Personal Pension (SIPP) is a personal pension scheme that helps you accumulate a sum of money to provide you with an income throughout retirement. You may be eligible for tax benefits when you contribute to a pension, whilst your money is invested, and when you retire.

You can claim tax relief on your personal pension contributions relative to your income tax band – in simple terms, this means for a basic tax rate payer for every £100 you put into your pension you will automatically receive an additional £25 from the government. If you are a higher rate tax payer, you will get the £25 automatically, but can also claim for the additional tax relief (relative to your income tax band) in your self assessment. The investments in your pension will grow free from income tax and can be sold without incurring a Capital Gains Tax charge. You can usually take 25% of your total pension pot as a tax-free lump sum from the age of 55 (this is set to change to 57 on 6 April 2028), and the remainder will be taxed according to your income tax band.

Once you’ve started to save into your pension, you will normally have to wait until you’re 55 before you can draw any money from it. You can then decide whether to go into income drawdown, buy an annuity with your savings, or do a combination of the two.

A Self Invested Personal Pension (SIPP) is a personal pension scheme that helps you accumulate a sum of money to provide you with an income throughout retirement. Fortunately, the government wants you to save for retirement, so there are a number of tax benefits available to you (see question 15 above for more detail).

You save into a pension so that you have an income when you retire. This depends on the value of your savings when you retire, which in turn depends on how much you put in and how your investments perform.

The Moneyfarm Pension helps you save for retirement in a tax-efficient way. When you invest in a Moneyfarm Pension you’ll be invested in the portfolio that best reflects your needs.

You can transfer money from your other pensions into your Moneyfarm Pension, including from SIPPs and workplace pension schemes, so long as you haven’t started to take income from them.

You won’t be able to transfer defined benefit schemes, also known as final salary schemes, you also won’t be able to transfer existing workplace pension schemes where your employer is currently contributing.

Your pension savings are initially transferred as cash, and then reinvested once the money arrives in your Moneyfarm Pension. You may lose certain benefits or incur exit fees if you leave your current provider, and there is no guarantee that the benefits you receive from your Moneyfarm Pension will be more favourable, and they may be lower. 

It is important you understand any changes in guarantees or benefits and the fees your current provider may charge before transferring your existing pensions to the Moneyfarm Pension. For more information please see our Key Considerations page. Moneyfarm won’t charge you a fee for transferring your pension.

Standard Moneyfarm minimums apply – you’ll need at least £500 in your pension to transfer but we recommend at least £2,500 to benefit from full diversification.

When you create a pension portfolio with Moneyfarm you’ll be asked if you’d like to transfer a pension. All you need to do is fill in the fields and we’ll manage the transfer process on your behalf, free of charge. You’ll need to know your current pension provider, account number and estimated value – you’ll find all of these details on your latest pension statement.

No, unfortunately we can’t accept crystallised pension transfers.

We can accept the transfer of any defined contribution pension, provided you haven’t started to take benefits from this and that there are no loss guarantees. We can’t accept the transfer of final salary (defined benefit) pensions.If you have already started to take benefits from your pension we can’t accept the transfer.

Pension transfers vary by provider. Some providers are on an automated platform which takes an average of eight working days. Others take longer, and can take months. The team at Moneyfarm will chase your existing provider on your behalf and let you know if there are any issues.

If you die before the age of 75, the value of your pension can be paid to your beneficiaries in the form of a lump sum or as income. The benefits will normally be tax-free, as long as they are paid (or, in the case of the payment of pension income, designated for that purpose) within two years of your death. If you die after reaching 75, the value of your pension can still be passed to your beneficiaries, but will be subject to income tax at the rate your beneficiary pays tax.

You can use all or part of your pension to purchase an annuity with another provider at the point of retirement. The amount of income and level of benefits you receive will depend on the annuity rate offered to you by the annuity provider you choose at the time. Annuity rates fluctuate and may be higher or lower in the future. If you have any questions, contact a financial advisor.

You can usually take 25% of your total pension pot as a tax-free lump sum from the age of 55 (this is set to change to 57 on 6 April 2028). The remainder can be used to provide you with an income throughout retirement – typically through an annuity or income drawdown – and will be subject to income tax depending on its value and your other taxable income. You may end up paying a lower rate of tax when you retire as your income reduces. For example, you may pay 40% tax when working, but just 20% when you retire. Remember, there are generous tax advantages to saving into a personal pension, you can find out more on our pension page. It is also important to check your existing pensions before you transfer them as some pensions may have a benefit called ‘Protected tax-free cash’ where you may be able to withdraw more than 25% tax free. Please see our Key considerations page for more info.

The lifetime allowance (LTA) is the maximum amount you can draw from pensions (workplace or personal) in your lifetime without paying extra tax. This figure is currently £1,073,100, but the charge for exceeding the LTA will be removed from 6 April 2023, with the allowance abolished entirely from April 2024. This means that in the future you can save as much you want into a pension without incurring a tax charge. The rate of the tax you pay on pension savings above the lifetime allowance depends on how the money is paid to you and when you took your pension savings.

If you took your pension before 6 April 2023, the rate is:

55% if you get it as a lump sum

25% if you get it any other way, for example pension payments or cash withdrawals

If you took your pension on or after 6 April 2023, there is no lifetime allowance charge