Yahoo Finance Two thirds of self-employed Brits have no pension fund
Self-employed Brits are headed towards a pension crisis, as they can’t afford to save for retirement.
Research by Fidelity Investments has found two thirds (62%) of self-employed Brits have never paid into a pension scheme, compared to just a third (32%) of employed people.
This means millions of taxi drivers, hairdressers, plumbers, electricians, photographers, writers and small business owners – among others – across the nation are being left behind when it comes to saving for the future.
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In the UK, under automatic enrolment, it is compulsory for employers to offer eligible workers a workplace pension. Every employee who earns at least £10,000 with their employer is automatically enrolled into the pension scheme, requiring a minimum contribution to be made every month from both the employer and the employee.
Total minimum contributions currently stand at 8%, of which 3% must be paid by the employer. Self-employed workers, however, miss out on receiving a workplace pension and the employer contributions that come with it.
What’s more, three in 10 (28%) self-employed Brits currently have no savings for the future at all. Of these people, more than two thirds (70%) said it is because they simply cannot afford to put money away for retirement.
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However, another 8% said it was because they don’t know the best way to save.
Two in five (39%) of self-employed workers told Fidelity they did not know what a self-invested personal pension (SIPP) – a personal pension but with more flexibility – even is.
But, unsurprisingly, self-employed women have very different experiences to self-employed men.
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Not only are men 14% more likely to have a private pension than women, they are 5% more likely to have a workplace pension from a previous employer – reaffirming that the gender pay gap is still a problem in the UK.
As a result, two thirds (61%) of women said they aren’t saving enough for retirement, while a third (34%) said do not put away money for the future – including a pension – on a regular basis.
