Nearly 1,000 self-employed individuals made six-figure contributions to their personal pension pots during the 2023-24 tax year, according to figures from HM Revenue and Customs (HMRC) obtained by the money app Plum. Among the top 25 entrepreneurs contributing to personal pensions, the average amount paid in over the year was £304,400.
HMRC’s data, derived from self-assessment tax returns, reveals that these “super contributors” remain outliers. A relatively small number of self-employed people made six-figure contributions. Specifically, around 600 self-employed individuals contributed between £100,000 and £124,999, 300 contributed £125,000 to £149,999, 100 contributed £150,000 to £174,999, and another 100 contributed £175,000 or more.
Figures were rounded to the nearest 100, and self-employed people who made no pension contributions were excluded from the analysis. The average annual pension contribution by self-employed people who did contribute in 2023-24 was £7,700. Some 90,100 self-employed contributors paid in £999 or less, according to HMRC’s gross contribution figures.
The data also indicates that many self-employed people are not actively saving for retirement through personal pensions, despite millions being self-employed across the UK.
Expert Insights on Self-Employed Pension Saving
Rajan Lakhani from Plum commented: “For salaried employees, auto-enrolment provides a great foundation for their retirement planning. However, for the self-employed, the responsibility falls on them to organise their own pensions. Because the self-employed face constant unpredictability over when they will be paid, this makes it harder to plan for retirement. And while it’s amazing that some managed to lump £300,000-plus into their pots in a single year, these super contributors are very much the exception to the rule.”
He suggested that needing cash in the bank or plans to sell the business one day may deter some from saving into a pension. “Businesses are not always easy to sell, regardless of performance. Structural changes in the economy, family issues or sudden shifts in demand mean that many businesses end up failing despite earlier successes,” Lakhani added.
Will Bryant, Plum’s director of wealth strategy, said: “Increasing your contributions incrementally, or making top-ups when you have spare cash, can help you avoid a pension shortfall later on and give you a more comfortable lifestyle when you do retire.”
Pensions Commission Warning
On Tuesday, the Pensions Commission highlighted that self-employed people are among groups particularly at risk of under-saving for retirement. It noted that only 4% (one in 25) of wholly self-employed workers are saving for retirement. The commission’s interim report on the state of retirement saving in the UK warned that significant groups of people could face a severe cliff-edge when they retire, including women, low and middle earners, and people with disabilities.
The report stated: “Given there is no automatic enrolment for the approximately four million self-employed workers in the UK, the inertia-based pension-saving system does not provide for many who need it most.” Around 15 million people are thought to be under-saving for their retirement. The commission called for a fresh “national settlement” for pensions, with a final report and recommendations expected in early 2027.
