People risk being left without enough money to retire.<\/p>\n
Just one in five self-employed people pay into a pension scheme, according to a survey by thinktank The Social Market Foundation, compared with 78% of employees.<\/p>\n
Of the self-employed workers who do regularly contribute to personal pension schemes, around a third (31%) contribute the same amount each month, rather than a percentage of their earnings, meaning their contributions do not increase over time.<\/p>\n
The research also found 30% of the surveyed self-employed people do not contribute to their pension every month, while 10% contribute less than once a year.<\/p>\n
Not being able to afford saving was the major reason why the self-employed do not contribute to a pension, the report found.<\/p>\n
\u201cHowever, affordability is clearly not the whole story; an employee at the same income level as a self-employed person is still much more likely to save into a pension,\u201d it noted.<\/p>\n
Online banking group Monzo, which commissioned the report, surveyed 1,000 self-employed workers in the UK for the study. Some two-thirds of respondents said they either \u2018don\u2019t really understand\u2019 or only \u2018have a basic understanding\u2019 of pensions, with those on lower incomes more likely to save spare cash at the end of the month in an instant access savings account instead.<\/p>\n
John Asthana Gibson, researcher at Social Market Foundation, said: \u201cThe low rates of pensions saving by self-employed workers should be a huge cause for concern for policymakers. If trends continue, large numbers of Britain\u2019s entrepreneurs will struggle to live to the standards they rightly expect in retirement.\u201d<\/p>\n
One issue highlighted is the lack of an auto-enrolment scheme for self-employed people, which has widened the gap between those who work for themselves and employees of businesses.<\/p>\n
\u201cIt\u2019s simply untenable for the government to continue to overlook this problem. We should build on the success of auto-enrolment for employees and ensure that people in this crucial but often forgotten part of the labour force are encouraged to sufficiently save for their retirement,\u201d said Asthana Gibson.<\/p>\n
The government has launched a new Pensions Commission to identify barriers within the current pensions system that could lead to future retirees being poorer than retirees today.<\/p>\n
Self-employed people (along with lower earners and ethnic minorities) have been identified as particularly at risk, with more than 3 million not saving into a pension.<\/p>\n
James Shafe, group policy director at Monzo, said: \u201cWe welcome the government\u2019s Pensions Review and its focus on ensuring everyone saves enough for retirement. Crucially, this must tackle the widening gap between the employees and the self-employed.<\/p>\n
\u201cThe 4 million self-employed workers in the UK are the backbone of our economy, yet they’re at most risk of being left behind when it comes to saving for retirement.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"People risk being left without enough money to retire. Just one in five self-employed people pay into a…\n","protected":false},"author":2,"featured_media":6247,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-343128","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115025628590125709","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/343128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=343128"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/343128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/6247"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=343128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=343128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=343128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}