What is a pension and do I need one?

A pension is a type of financial product that has generous tax benefits because the government wants to encourage people to have one, so they reward you with 25% tax relief on the money you save. There are a few different types of pension. Collegia operates a type of defined contribution personal pension, which gives you the most control over where your money is invested. The big difference is that if you’re self-employed, you’re left on your own to plan your pension, and you won’t get contributions from an employer in the way that traditional employees do. You are still entitled to tax relief (government contributions) on your pension, and as long as you pay National Insurance for long enough, you’ll still be entitled to the state pension when you retire. If you’re self-employed and want a pension, you’ll need to set up a personal or private pension. The good news is – Collegia was built for anyone, regardless of their employment status.

Updated on: 09/04/2024