Business News

Auto-Enrolling The Self-Employed ‘Would Exclude 60%’

A potential extension of auto-enrolment would only benefit 40% of self-employed workers, according to research.

The Pensions Policy Institute’s review into potential workplace pension solutions for self-employed workers revealed 12% of sole traders currently save into a pension.

Fewer than 1 in 3 (28%) believe pensions are the safest retirement saving option, while only 7% expect their business to provide the platform for a comfortable retirement.

More than a million people have become self-employed since the economic downturn in 2008, raising the UK’s self-employed total to 4.86 million in August 2017.

Jon Greer, head of retirement policy at Old Mutual Wealth (which sponsored the research), said:

“The savings system needs to recognise not all self-employed people will want to commit money into a pension and there may be good reasons for this.

“To make pensions more appropriate for the self-employed, a pension ‘sidecar’ should be explored, a pool of money made accessible at any age in times of need.

“I would urge the government to steer clear of a one-size-fits-all approach to pension saving for the self-employed.”

One solution under consideration by the Department for Work and Pensions would be to auto-enrol self-employed workers when they submit their self-assessment tax return.

This would also offer self-employed savers the option to opt out when submitting their tax return.

For any help or advice with financial planning talk to RPD

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