I am a freelance worker – should I use property to kickstart my pension?

2 October 2019


Can you help me start planning for retirement? I’m a freelance worker so don’t qualify for automatic enrolment. Are there specific pension schemes for freelancers? Or should I be looking at pension alternatives, perhaps investing in property instead?



Property has proven to be a popular investment in recent years, but you must consider the pros and cons carefully. While property values have gone up, this needs to be considered alongside the costs. For instance, you will need to pay tax on any rental income received and you will also need to pay for the property’s upkeep.

When you come to sell, you will also need to pay capital gains tax – all of this can add up to a tidy sum.

With a pension, you will receive tax relief on anything you pay in. So if you are a basic-rate taxpayer, for every £80 you pay in the government will top it up to £100. If you are a higher-rate taxpayer, then you only need to pay in £60 for the government to top up to £100. You will also benefit from tax-free investment growth.

While you do pay tax when you come to draw pension income, you are able to take 25% tax-free. These are powerful benefits that should not be ignored. 

There are no specific pension schemes set up for freelance workers, but consider hiring an independent financial adviser for help choosing the right provider and an investment strategy to suit your needs. For a list of advisers, visit Unbiased.co.uk.

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