Over 3m self-employed could face bleak retirement
Figures show that over half of self-employed people do not have a pension, and with the number of self-employed expected to hit 6 million in 2028, this figure is seen to reach 3.3 million within the next 10 years, IPSE has warned.
The Association of Independent Professionals and the Self-Employed (IPSE) has warned that unless there is urgent change, 3.3 million self-employed people could be left without a pension within the next 10 years.
The new analysis, released earlier this month, is based on the growth in freelancers over the last decade and the number who have never saved into a pension.
“It is deeply worrying that so many hardworking people could be left facing bleak later years because there simply aren’t products that work for them,” said Jonathan Lima-Matthews from IPSE.
“Freelancers are the essential drivers of innovation for the UK economy, so we all rely on them being given every chance to thrive. The government has done some positive work, but it must urgently get behind innovative pensions solutions and push the industry to do much more. The longer this is left, the worse it will get.”
IPSE’s research has pointed to a drastic increase in the UK’s self-employed sector since 2000. According to the association’s findings, the three groups most at risk are those new to self-employment, women and younger self-employed people.
With the rate of women entering self-employment growing by 75 per cent, and the sharp rise of 16- to 24-year-olds (104,000 in 2001 to 181,000 in 2016), these sub-sections of the self-employed simply cannot be ignored, IPSE said earlier.
The association has developed a number of recommendations to combat the issue, including the rollout of a “sidecar pension” which would work by channelling money into both a pension pot and a separate “rainy day fund” to be drawn on in times of emergency.
IPSE has also suggested the new Single Financial Guidance Body should offer tailored advice for the self-employed, and that pensions policy documents should be jargon-free and written in plain English to cater to a wider population.