Britain’s self-employed could be failing to make adequate preparations for retirement, as new research reveals they are some of the least likely in the world to contribute to a pension.
The global study, by pension management firm Aegon, surveyed self-employed workers in 15 of the world’s largest economies across Europe, Asia and the Americas and uncovered concerning attitudes towards pension savings in the UK.
According to the study, three-quarters of self-employed workers in Britain made no regular pension savings, with Japan the only country producing a higher figure. Subsequently, just 15 per cent claimed that they were optimistic about having enough to live on through retirement.
Further, some 12 per cent of the UK’s self-employed had no intention of ever saving for retirement – the highest figure across all countries.
Commenting on the findings, Aegon’s head of pensions, Kate Smith, warned that the often precarious nature of self-employment represented a “unique challenge” when it came to saving for retirement.
“As well as missing out on a lifetime of employer contributions, a variable income means many don’t have certainty of how much they’ll earn from one month to the next, making saving difficult,” she said in a statement.
Smith added that with growing numbers of Britons working for themselves “there is a growing concern that this group are increasingly likely to struggle with inadequate retirement income when they eventually give up working”.
A recent review by the Association of Consulting Actuaries (ACA) highlighted the failure of the government’s auto-enrolment initiative to provide any support for self-employed workers. The pensions body raised the issue of self-employed bosses paying into employee’s pensions, while missing out on government contributions themselves.
A 2016 report published by Citizens Advice found that over half of self-employed workers were either concerned or very concerned about their post-retirement financial plans.
However, the latest study did uncover one possible caveat. Despite widely neglecting to save, half of the UK’s self-employed workers were optimistic over retirement plans. Some 53 per cent admitted that they would be working past the age of 65, but cited career enjoyment and keeping the brain active as the main reasons.
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