Self Employed Pension

Yes you can, as a self employed person you have the same 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 or accountant. To register your employer for this, please email support@moneyfarm.com today.

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 2021/22 tax year, this limit is £40,000 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. 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, 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.
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.
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 may be lower. Moneyfarm won’t charge you a fee for transferring your pension.
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.

Standard Moneyfarm minimums apply – you’ll need at least £500 to open a portfolio 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.

No, unfortunately we can’t accept crystallised pension transfers. If you have only crystallised a portion of your pension (taken benefits from a small amount of your overall pension) then we can transfer the uncrystallised portion.

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 without you taking independent financial advice. 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, up to as much three 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 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. Your beneficiaries may pay a tax charge if your pension value exceeds the lifetime allowance. 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.

If you use all or part of your pension to purchase an annuity with another provider, 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 may be lower in 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. 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.

Pensions have a lifetime allowance, which is £1.05 million in the 2021/22 tax year.
If your total pension savings exceed the lifetime allowance when you decide to take benefits, a tax charge applies, called the lifetime allowance charge. The amount of the lifetime allowance charge depends on how you take the excess benefits from your pension. If you take the excess as a lump sum, it will be subject to a 55% tax charge. If you decide to use the excess as income, it will immediately be subject to a 25% tax charge, and your income will then be subject to income tax. If your savings exceed the new lower limit after the standard lifetime allowance was reduced to £1 million in 2016, you may be able to apply for a lifetime allowance protection scheme.