Pension savers issued urgent £25,000 warning | Personal Finance | Finance
A retirement specialist has issued a pensions warning to people who go into self employment, warning that pausing contributions for just five years could see tens of thousands wiped off your savings. According to new research carried out on behalf of Standard Life, half (49%) of self-employed workers with a private pension are changing their pension saving habits once they opt to become their own boss, potentially leaving themselves short when they retire.
Standard Life says this shift in saving habits comes as the wider picture for self-employed retirement saving comes under increased scrutiny. The Pensions Commission’s interim report, which is tasked with making recommendations to the government to ensure the pensions system is adequate, fair, and sustainable, recently highlighted that a mere 4% of those who rely solely on self-employment are putting money into a pension pot. The figures highlight the importance of planning for your future if and when you decide to leave your employer and start working for yourself, it adds.
The Standard Life research was conducted by Opinium between January 15 and January 21, 2026 among 4,000 UK adults, with results weighted to be nationally representative of the UK adult population.
It found that a fifth (18%) of people use becoming self-employed as an opportunity to increase how much they save, though among a third of them (33%), the shift triggers the opposite effect, resulting in them lowering, pausing or stopping their pension contributions completely.
Those who pause pension contributions after becoming self-employmed do so for an average of two years, while 15% extend the break to over five years, according to Standard Life.
However, pausing contributions for five years in your 30s could reduce a pension pot by around £25,000 by the age of 68, according to retirement specialist’s calculations, while increasing contributions by £250 a month over the same period could add around £26,000.
Mike Ambery, Retirement Savings Director at Standard Life plc, called on self-employed people to be proactive about their savings from the start to support themselves down the line. “Life rarely follows a straight line – and pensions don’t either,” he said.
“Becoming self‑employed is a major life moment that often reshapes how people think about their finances, with contributions rising, falling or pausing as income becomes less predictable and the structure of a workplace pension falls away. The Pensions Commission’s interim report brings this challenge into sharp focus.
He noted that for many younger workers this shift occurs earlier on in their careers, “at a point when saving habits are still being established”. As a result this can be a more fluid period, “where pension contributions move in both directions”.
“Positively, for some it can also be a trigger to take greater control and even increase what they put into their pension,” Mr Ambery added. “Whatever the approach, the key is staying engaged and making conscious decisions about long‑term saving.
“In the absence of a structured workplace pension, many people who move into self‑employment have historically turned to products like Lifetime ISAs to support their retirement goals.
“However, with the Government signalling plans to phase out their use for retirement saving, some may be left facing a gap in their long‑term plans. This makes it even more important to consider how pensions can provide a more stable, tax‑efficient foundation for the future when making the transition to self‑employment.
“By taking a proactive approach early on – whether that’s setting up or reviewing a pension, maintaining contributions where possible, making the most of available tax reliefs, or keeping track of existing pots – self‑employed workers can stay in control and keep their retirement plans on track as their working lives change.”
