Millions of self-employed people are being left without simple and effective routes into retirement, according to research by the Society of Pension Professionals.
The paper called for a fundamental rethink of how the UK helps people who work for themselves build financial security for later life.
It also noted that while the introduction of automatic enrolment in 2012 transformed pension saving for employees by making saving the default, self-employed have largely been left to navigate retirement planning alone. The self-employed are left to decide whether to save, find a pension, choose investments and work out how much they can afford, often while managing unpredictable income and fluctuating cash flow.
The current Pensions Commission’s interim report found that just 4 per cent of wholly self-employed workers are currently saving into a pension.
Martin Willis, chair of the SPP’s self-employment working group, says: “We cannot expect a modern, flexible workforce to thrive in a pension system designed around a traditional payroll. The challenge now is to remove the obstacle course facing the self-employed and create a simpler, more flexible route to retirement saving.”
The SPP is the representative body for a wide range of providers of advice and services to pension schemes, trustees and employers.