Education

For smaller investors, gains often remained modest, allowances helped soften tax exposure, and many households focused more on choosing investments than thinking about the tax consequences of eventually selling them.

Whether a stakeholder pension is still worth using depends on the saver's situation: self-employed, topping up provision, saving for a child, or seeking a simple capped-charge alternative outside the workplace.

Annuities shift longevity andInvestmentrisk to an insurer and provide certainty; drawdown keeps the pot invested and offers flexibility and potential growth but with market and longevity risk.

In-scheme AVCs sit alongside the main workplace scheme (commonly run by Prudential, Standard Life, Legal &Amp; General or Scottish Widows for public sector employers). Free-Standing AVCs (FSAVCs) are separate contracts with an insurer, now less common since stakeholder pensions and SIPPs grew.

In 2025/26, the headline rules include a 60,000-pound standard Annual Allowance, a 10,000-pound Money Purchase Annual Allowance after flexible access, a 268,275-pound Lump Sum Allowance, a Normal Minimum Pension Age of 55 (rising to 57 from April 2028) and contribution limits of 100% of …

The case for AVCs strengthens for higher-rate taxpayers, for employees near retirement with unused tax-free cash capacity in a defined benefit scheme, and for those with access to salary sacrifice. The case weakens where competing priorities such asDebtrepayment,Mortgageclearance or insufficient emergency savings dominate.

Self-employed UK workers do not benefit from auto-enrolment and need to set up their own pension provision. A SIPP can offer flexible contributions, tax relief at the saver's marginal rate and a wide investment range. This article explores how SIPPs fit self-employed circumstances, the …