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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
8 of the best properties for sale near ski slopes
The best properties for sale near ski slopes – from a luxury cabin in Geilo, one of Norway’s premier ski resorts, to a large chalet in Valais, Switzerland
By Natasha Langan Published
-
Cash hoarders take total UK savings to £2 trillion – why aren’t we investing?
Investment-shy Brits are hoarding huge amounts of cash in their savings accounts. We look at the case for saving versus investing.
By Katie Williams Published