Self-Employed Workers “Seriously Concerned” About Pension Shortfall

Almost half of the UK’s self-employed workers are worried that they won’t have enough money to retire.

According to a new report from think tank Demos, 46 per cent of self-employed workers are “seriously concerned” about facing a shortfall in their pension savings.

In addition, only 17 per cent of those polled said that they were already paying into a pension scheme, compared with a rate of 50 per cent among employed workers.

In response to the survey results, Demos has made a list of suggested policy recommendations, including an auto-enrolment pension scheme which involves government contributions, an end-to-end reworking of the Universal Credit process, and the addition of 2.5 per cent ‘engagers tax’ which would be paid by any company which hires self-employed workers.

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“The rise of self-employment is one of the biggest changes to the modern economy in the last couple of decades and our research shows it is an enjoyable experience for most people,” said Alan Lockey, the author of the report and head of Demos’ Modern Economy Programme.

“We need to think pragmatically about whether we should actively encourage it – it could be that it is the British solution for a more flexible, less rigid approach to life and work in the future, as it already is for millions of people.

That means we need a new deal to boost security for the self-employed and by far the most urgent problem is dealing with a looming pensions and savings crisis.”

According to Demos calculations, there are now more than 4.77 million self-employed workers in the UK, comprising almost 15 per cent of the British workforce.

However, the report argued that the policy systems such as tax, welfare, training and employment law do not yet cater sufficiently to the self-employed population.

Despite the financial insecurity, 80 per cent of respondents said that they were happy with their employment status, while 70 per cent said that they intended to remain in self-employment for the foreseeable future.

Six in ten of the workers surveyed said that “being in control of my own work” was the main benefit of their job, while 57 per cent said that they enjoyed “greater control over my hours”, and 56 per cent liked having the “freedom to choose where they work”.

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.