- Self-employed pension savings levels hit record lows in 2019/20, HMRC figures suggest
- Self-employed workers contributed £830 million to pensions during the year, down from over £1 billion in 2018/19
- Falling pension contributions even more worrying given the number of self-employed workers has been increasing in recent years
- Latest figures do not capture the impact of lockdown, which will almost certainly have pushed savings levels among the self-employed even lower
Tom Selby, head of retirement policy at AJ Bell, comments:
“Given the number of self-employed workers has been spiking over the last two decades, the fact the amount being saved in pensions has fallen dramatically among this section of the labour market is both counter-intuitive and extremely worrying.
“While automatic enrolment has been successful in boosting pension saving among employed workers, it does precisely nothing for the self-employed.
“The Government has previously promised to extend the principles of auto-enrolment to the self-employed, but so far we have seen little by way of progress.
“Without a nudge into a pension scheme and a matched contribution, it is hard to see how policymakers can dramatically move the dial on self-employed retirement saving.
“People are always looking for the next big pensions crisis – this could be it. If the Government doesn’t step up and do something to boost savings levels among the self-employed, there risks being millions of people facing retirement disaster in the not-too-distant future.”
“At the very least a communications drive to emphasise the importance of retirement saving among the self-employed – and the dangers of doing nothing - is urgently needed.”
Source: HMRC
