Mind the gap

Self-employed would back new laws to expand retirement savings

For the self-employed, even if the will to save for retirement is there, the way can be problematic. Self-employed workers want Government help to save for retirement and would back new laws to expand auto-enrolment or to make saving for retirement compulsory, new research[1] shows.

For those who are self-employed, it can be all too easy to push pensions to the bottom of their priority list, especially as they may feel the need to have some flexibility in their finances in case of a downturn in earnings.

Encouraging saving for retirement
More than half of self-employed workers questioned want the law changed to encourage them to save for retirement – 27% would support the expansion of auto-enrolment to cover the self-employed, while 27% would back compulsory pension saving.

The study highlighted the growing pension crisis among the self-employed, with more than two fifths (43%) – the equivalent[2] of more than two million workers – admitting to having no form of pension. More than a quarter (28%) say they will be reliant on the State Pension as their main source of retirement income.

Make your own arrangements early
The research shows nearly one in five (18%) self-employed people do not believe pensions apply to them, while 20% say they find the rules very confusing, and 15% worry they cannot immediately access their funds if out of work.

There has been a significant rise in the number of people working for themselves since the turn of the century. If you’re self-employed, you don’t have as many pension options open to you as an employed individual, so it’s vital you make your own arrangements as early as possible so you don’t miss out in retirement just because you’ve decided to go it alone.

Source data:
[1] Consumer Intelligence conducted an independent online survey for Prudential between 20 and 21 June 2018 among 1,178 UK adults

[2] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/september2018#summary-of-latest-labour-market-statistics