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# Pension and Retirement: The Self-Employed Crisis
Most self-employed construction workers have almost nothing saved for retirement. This guide explains why, what the State Pension actually gives you, and how to start putting something away even if you're late to it.
Rule of thumb: if you're not paying into a pension, you're planning to work until you physically can't. Your knees and your back will decide your retirement date for you.
The Numbers Are Grim
Only 14% of self-employed people contribute to a pension. That's down from 33% in 2005. The typical self-employed pension pot sits at around £50,700 (2025-26 rates). Compare that to employed workers who've had auto-enrolment doing the heavy lifting for years, often building pots worth hundreds of thousands.
A chippy earning £35k who puts nothing away for 30 years will retire on the State Pension alone. That's about £230 a week. Less than a day rate.
The gender pension gap is 48%. Women in construction are a growing part of the industry, and they're hit hardest because they're more likely to take career breaks and earn less over a lifetime.
What the State Pension Actually Gives You
The full new State Pension is £230.25 per week (2025-26), which works out to £11,973 a year. It rises to £241.30 per week in 2026-27.
You need 35 qualifying years of National Insurance contributions for the full amount. You need at least 10 qualifying years to get anything at all.
Check your State Pension forecast at gov.uk/check-state-pension. It takes two minutes and tells you exactly where you stand.
Tip for new starters: from April 2024, if your profits are above £12,570, Class 2 NI contributions are "deemed paid" automatically. You still build qualifying years without paying the old £3.45 a week. Below that threshold, you can pay voluntarily to protect your record.
Why Construction Workers Get Caught Out
Three reasons:
- Cash flow is lumpy. A busy month followed by two quiet ones makes regular contributions feel impossible.
- CIS takes 20% already. It feels like you're already losing enough. But CIS goes to your tax bill, not your pension.
- "I'll sort it later." Later becomes 20 years of nothing saved.
The Lifetime Allowance was abolished in April 2024, so there's no longer a cap on how much you can build up tax-free. That removes one excuse.
Your Options
NEST (National Employment Savings Trust)
Open to anyone, including self-employed. Low charges (0.3% annual management charge after the initial 1.8% contribution charge). Simple to set up. Government-backed.
PensionBee
App-based. Consolidates old workplace pensions into one pot. Annual fees from 0.5% to 0.95% depending on the plan. Good if you've got scattered pots from old PAYE jobs.
Vanguard
Low-cost index funds. Annual charge 0.15% plus a £4/month account fee (capped at 0.375%). Best value for larger pots.
Moneybox
Rounds up spare change from purchases and invests it. Simple start if you're not ready to commit to bigger amounts.
What a Small Contribution Actually Does
£50 a month for 20 years at a 5% average return builds to roughly £20,000-£21,000. That's not a fortune. But it's £20k more than nothing. And if you start putting in £200 a month once you're earning well, that changes the picture completely.
Tax relief means the government tops up your contributions. Basic-rate taxpayers effectively pay £80 for every £100 that goes into their pension. Higher-rate taxpayers can claim back even more through Self-Assessment.
Tip for new starters: set up a standing order on the day your biggest contractor pays you. Even £25 a month. You won't miss it, and in 30 years you'll be glad you started.
Buying Back Missing Years
You can fill gaps in your National Insurance record going back 6 years. A voluntary Class 3 contribution costs £17.45 per week (2025-26 rates). Each qualifying year adds roughly £6.85 per week to your State Pension, which is £356 a year for life. That's a solid return.
Call the Future Pension Centre to check whether buying back years makes sense for you.
Sources
- DWP, "Workplace Pension Participation and Savings Trends," 2024
- HMRC, "Self-Assessment and National Insurance," 2025-26
- ONS, "Gender Pension Gap Analysis," 2024
- gov.uk, "New State Pension rates 2025-26 and 2026-27"
- gov.uk, "Voluntary National Insurance contributions"
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