2 million self-employed workers have no pension plans. Are you one of them?
A considerable amount of self-employed workers don’t have a retirement plan. Are you one of them?
21ST JUNE 2018
If you work for a company or organisation, chances are you belong to a workplace pension, with your employer matching your monthly contributions. But what if you are self-employed?
In recent years, the number of workers opting to go into business for themselves or undertake freelance employment has risen dramatically. As of 2018, almost 5 million people are their own boss – almost one million more than a decade ago.
For this substantial part of the workforce, there is no such thing as a workplace pension. The onus is on the self-employed to build their own private pensions. And yet, recent findings suggest that almost two million workers are not putting anything aside for their retirement.
A study by Prudential revealed that two-fifths of the self-employed workforce have not provisioned for later life, with approximately one-third of those surveyed stating that they simply did not have the money to set aside, and another third expecting to reach retirement without any additional savings.
Other factors undoubtedly contribute to the malaise in self-employed pension saving, with a lack of financial confidence and knowledge featuring prominently in Prudential’s questionnaire. In an earlier study by the ONS, as few as 15% of those surveyed said they had faith in employee pensions.
This uncertainty around retirement planning and pension contributions could lead to significant issues in later life for a whole generation of workers.
“Without an automatic enrolment process or any mandatory organisation in place, self-employed workers could find themselves constantly working to sustain businesses and households in the short term, and not provision sufficiently for the future,” says Wealth of Advice’s Chris Breward.
“It’s understandable that pensions may not seem the first priority, but a lack of sufficient planning could have considerable ramifications further down the stretch.”
Wealth of Advice can provide tailored pension planning for self-employed workers and business owners.
To start planning for your retirement, get in touch today.
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