Self-employment gives you freedom, but it also means you’re flying solo when it comes to planning for the future. Unlike PAYE workers, you don’t have access to a company pension scheme or employer contributions. That means it’s entirely up to you to take charge of your retirement savings.
Without an employer sorting out your pension, planning for the future is entirely up to you. And while retirement might seem far away now, the decisions you make today could mean the difference between scraping by and retiring comfortably.
In this article, we’ll break down why having a pension is essential if you’re self-employed, the different pension options available to you, and how starting early can make a big difference to your long-term financial security.
Why the Self-Employed Need a Pension
Many self-employed people put off thinking about retirement, assuming they’ll “sort it out later.” However, the truth is, the earlier you start planning, the better your future will look. Here’s why a pension isn’t just a good idea; it’s essential.
The State Pension Might not Be Enough
As of 2025, the full State Pension (Contributory) in Ireland pays €289.30 per week, which is just over €15,000 per year.
Now ask yourself: could you live on just the State Pension? Would it cover your rent or mortgage, bills, groceries, and healthcare? For most people, the answer is no, and if you haven’t made enough PRSI contributions, you might not even qualify for the full amount.
That’s why relying solely on the State Pension is a risky move. A private pension helps you fill the income gap and maintain your lifestyle after retirement.
You’re Responsible for Your Retirement
Unlike employees in PAYE jobs who might have access to employer-sponsored pension schemes, self-employed workers have to take care of everything themselves, from invoicing and taxes to savings and pensions.
If you don’t set up a pension, no one else will do it for you. The longer you delay, the more you’ll have to catch up later, or worse, the more you’ll have to sacrifice in retirement.
Think of it as paying your future self. You work hard now; make sure future-you gets to enjoy the rewards.
Pensions Come With Big Tax Benefits
One of the most significant benefits of contributing to a pension? Tax relief.
- If you’re a higher-rate taxpayer (40%), you’ll get back €40 in tax relief for every €100 you contribute.
- That means saving for retirement can also reduce your tax bill today, a smart two-in-one benefit.
Pensions are one of the most tax-efficient ways to grow your money. For self-employed individuals who don’t have access to many tax breaks, this is one benefit that’s well worth taking advantage of.
Read our Guide to Pension and Retirement Planning to learn more.
Your Income May Not Be Consistent
Being self-employed often means that your income can fluctuate throughout the year. That can make saving unpredictable.
The good news? Pension plans, such as a PRSA (Personal Retirement Savings Account), are flexible. You can increase, decrease, or pause your contributions depending on your income at the time. This makes pensions more manageable, even if your business has good and bad months.
Retirement Will Come Sooner Than You Think
You might love your work and plan to keep going for years, but at some point, whether by choice or necessity, you’ll likely want to slow down or stop working altogether. When that time comes, having a pension in place means you won’t have to rely on the State or your family for support.
It gives you more control over when you retire and the freedom to enjoy life without constant financial worry. It’s not just about retiring early; it’s about having the option to retire comfortably, on your own terms.
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