The APPG on Financial Resilience has called for automatic enrolment for self-employed people.
The group has issued recommendations that were included in the Saving, Spending, and Surviving Report published today. These recommendations include automatic enrolment for self-employed individuals as well as other preventative financial measures.
Scottish Widows head of policy Pete Glancy says: “The new report published today by the APPG on Financial Resilience, and the consequent recommendations, present a positive step forward in building momentum for a solid long-term savings strategy from the government.
“As the cost-of-living crisis is undoubtedly having impacts on people’s finances, there has never been a better time for the government to open up discussions on this subject and engage with the wider industry to boost financial literacy and increase access to financial advice.
“Our 2022 Retirement Report found that the self-employed appear no worse off than average in the current economic crisis, but that they continue to face substantial inequalities in their use of pensions. More than a third (36 per cent) of self-employed are not currently saving for retirement – that’s equivalent to about 1.2 million people in the UK aged 30-64 years old.
“To combat this, the DWP should push ahead with work to understand how the self-employed could be better engaged and a new ecosystem constructed to ensure that they have the same opportunity to save for retirement as employed people.
“Record-breaking inflation does not just threaten peoples’ ability to save, it can also severely reduce the value of the savings they already have if they are not invested appropriately. The last time inflation was at 10 per cent was in 1982. Interest rates ran at around 12 per cent that year, meaning that risk free returns in the order of 2 per cent were still achievable despite high inflation. With interest rates today at just 1.25 per cent, the spending power of savings held in cash will be reducing at a rate of almost 9 per cent per annum until inflation is brought under control.”