Pension savings shortfall among the self employed

Almost two-thirds of self-employed people currently have no pension savings, while more than a quarter aren’t making any savings at all

Almost two-thirds of self-employed people currently have no pension savings, while more than a quarter aren't making any savings at all, according to new research from asset manager Fidelity International. Employed people are roughly half as likely to be falling short.

Fidelity's report warns that many people working for themselves face an uncertain future, both missing out on financial support from employers such as pension contributions, and failing to make their own provision.The research will add to the pressure on the government to consider mechanisms for bringing the self-employed into the auto-enrolment pensions system, with ministers currently considering several proposals for extending the scheme's reach.

But Fidelity also urged people to take action for themselves. While self-employed people often have unpredictable income streams and may have little disposable income, particularly when building up a business both individual saving accounts (Isas) and self-invested personal pensions (Sipps) are good saving options. Both offer generous tax reliefs, which boost the value of any savings people are able to make. Both products also feature flexible rules on contributions, allowing people to make deposits as and when their finances allow, rather than demanding fixed, regular sums.

Recommended

The minimum pension withdrawal age is set to rise – don’t get caught short
Pensions

The minimum pension withdrawal age is set to rise – don’t get caught short

From April 2028, the earliest age at which you can take money from your pension savings will rise to 57. It's vital that you understand the detail of …
13 Apr 2021
The end-of-tax-year to-do list for small businesses
Small business

The end-of-tax-year to-do list for small businesses

If you run a business, get on top of your paperwork before 2020-2021 draws to a close.
1 Apr 2021
Make sure you max out your pension contributions this year
Pensions

Make sure you max out your pension contributions this year

If you're saving for retirement, make sure that you have used up all their allowances before the tax year ends, and contributed as much to your pensio…
31 Mar 2021
Sunak sticks with SEISS support scheme for the self-employed
Small business

Sunak sticks with SEISS support scheme for the self-employed

The chancellor has extended the SEISS scheme to help the self-employed through pandemic-induced difficulties.
19 Mar 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
Four investment trusts for income investors to buy now
Investment trusts

Four investment trusts for income investors to buy now

Some high-yielding listed lending funds have come through the crisis with flying colours. David Stevenson picks four of the best.
12 Apr 2021