Is a self-employed pension crisis looming?

New research suggests that 45% of self-employed workers are not saving into a pension

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Research by the Association of Independent Professionals and the Self-Employed (IPSE) and financial planning consultants CMME Contractor Wealth has revealed that 15% of freelancers don't have a private or personal pension, while 30% say that despite having a pension, they are not currently paying into it.

Unlike employees, the self-employed do not benefit from automatic enrolment into a workplace pension or from additional contributions by an employer. The survey has identified three key reasons why freelancers are not currently saving into a pension:

  • 34% say they have other financial priorities;
  • 24% say they can't afford to put money into a pension;
  • 24% said that they stopped contributions to a pension after becoming self-employed.

Boost in self-employment numbers

The latest figures from the Office for National Statistics show that there are currently 154,000 more self-employed workers in the UK, compared to this time last year.

In total, there are now 4.4 million freelancers in the UK. There has been a significant rise in the number of women choosing to work for themselves, with an additional 93,000 self-employed women compared to last year.

The accountant’s role in advisory services is ever more relevant in these times where clients are looking for added value. Read our technical article on pension tax relief to better advise your clients.

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