Working for yourself means that you have to take responsibility for your future income as well as month-to-month earnings. While those in traditional employment have benefited from auto-enrolment, self-employed people are left to fend for themselves. Follow these top tips to avoid a nasty shock when you finally reach retirement age.

Check if you’re eligible for Nest

Many self-employed people are eligible to set up a pension using Nest, the government’s work-place pension scheme. If you qualify, then this is one of the most straightforward options available to you – and the costs for being in the scheme are low, too. You’ll be able to set up a direct debit to contribute a set monthly amount, and the scheme will automatically claim basic rate tax relief on your behalf.

It’s particularly good for those who may find themselves moving between employment and self-employment, since you’ll be able to remain a member of the scheme either way.

Consider using a Lifetime ISA

A Lifetime ISA isn’t a pension product, but for self-employed people who don’t have the benefit of employer pension contributions, it can be an interesting alternative. That’s because the government adds a 25% bonus to everything you save. Savings contributions are capped at £4,000 each year, meaning that you can gain a maximum bonus of £1k each year from the government. That’s going to massively outstrip any interest that you can earn from a traditional savings account.

The money can be accessed once you turn 60, or to put down a deposit on your first home. If you need to use the money sooner then you’ll lose the bonus and 5% of your contributions – so only use it for money that you definitely want to earmark for retirement.

Start saving as soon as possible

Thinking about the future can be hard, but the sooner you start saving the more your money will grow. Pensions benefit from compound interest, which means that the interest you earn each year will also start earning interest, creating a snowball effect that can lead to massive gains overtime. If you start saving for a pension earlier in your career, you’ll need to set aside a smaller amount each month, which means that the impact on your day-to-day finances won’t be quite as brutal.

Redirect regular expenses into your pension pot

For those who are struggling to find spare money to set aside, there are a few simple tricks. One of our favourites is to redirect any savings on your regular expenses directly into your pension. For instance, if you’re able to switch to a new energy supplier, phone tariff or car insurance provider then you might be able to save hundreds of pounds a year. That money could form a great basis for your pension. Similarly, cancelled subscriptions or a loan that you’ve finished repaying can be a great source of spare income.

It’s also important to avoid lifestyle creep. This means that, if you up your fees or land a more lucrative client, you should think about saving for the future before your start spending more on the weekly shop or going out more frequently.