High percentage of self-employed aren’t saving into a pension

Latest research has revealed that, worryingly, as many as 45% of contractors aren’t currently saving into a pension pot.

The report, compiled by the Association of Independent Professionals and the Self-Employed (IPSE) and CMME Contractor Wealth, also shows that 15% of contractors don’t have a private or personal pension at all.

With the current cost of living crisis, as well as the pandemic causing financial difficulties for many self-employed professionals, it comes as no surprise to learn that so many are currently unable to save for their future.

The top reasons given for not saving into a pension include:

• Having other financial priorities (cited by 34%)
• Affordability (24%)
• Ceasing contributions to a pension after becoming self-employed (24%)

Andy Chamberlain, Director of Policy at IPSE, said, “Successive governments have ducked the issue of self-employed savings for years, but the crisis is now too big for a future government to ignore. It will likely require intervention of a magnitude similar to automatic enrolment for employees.

“Pensions aren’t the only option for those saving for later life. Some self-employed people may find other methods of saving more attractive, if they were better suited to volatile incomes; the Lifetime ISA is one example, and IPSE has called for it to be revamped to better serve independent workers.”

Andy added, “With an election little over one year away, political parties with ambitions for government must get to grips with this challenge now and be unafraid to propose bold, radical solutions in their bid to win the backing of the self-employed.”

Mike Coshott, CEO at CMME Contractor Wealth, said, “Today’s findings are a disturbing reminder of the crisis in later life saving facing the self-employed, which shows no sign of abating amid increasing pressures on the cost of living.”

“Self-employed professionals naturally want to ensure that their businesses have the capital they need to function and grow, but it’s essential that they don’t overlook the need to set money aside for later life in the process.

“Consulting with financial professionals who understand the unique pressures of self-employment can make this a much less daunting task.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.