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.