People putting money aside for retirement is increasingly important as countries find it harder to support ageing populations. Setting up pensions for the self-employed should be a priority.
The idea of working for yourself has always been attractive. The flexibility, being able to choose when to work, where and how often is appealing to many workers.
In the UK, there has been a steady rise in people registering as self-employed. According to the Office For National Statistics (ONS), between 2001 and 2017 the number of self-employed increased from 3.3 million people to 4.8 million.
That means that at least 15% of the country’s workforce is now classed as self-employed. That’s a lot of tax revenue, a lot of earnings and in theory considerable pension contributions.
Unfortunately, many people who work for themselves are not saving enough. This is not necessarily deliberate; they just cannot afford to save for their retirement.
Pensions for self employed
The numbers associated with pensions for self employed people make stark reading. According to Prudential research, highlighted on the Small Business website, suggests that 43% have no pension in place.
Around one third of people surveyed said that they would have to depend on a state pension. At £168.80 per week (current UK figures), that will leave many people struggling.
Unfortunately, the self-employed are often forced to focus on day-to-day expenses. They juggle finances and don’t seem to have the time to sit down with advisers who might be able to help.
The global coronavirus pandemic has spooked financial markets and heaped further pressure on people who work for themselves.
This could make it even harder for some workers to save towards their retirement. What was already a worrying situation could get worse over the next few years.
Without an employer to encourage and assist with pension arrangements, the self-employed are being isolated.
Don’t leave it too late to grow your pension
Logic Wealth Planning exists to offer timely independent financial guidance. We listen, understand and develop plans that are unique to each client.
While self-employed people sometimes struggle to earn consistent levels of income, they should not put off saving for their future. We help them to find the best way forward.
Please be aware the value of investments or income from them can fall as well as rise. We’re here to help you make informed decisions.
If you are self-employed, call us on 0808 1234 321 or email email@example.com to discuss pension planning that fits your income and lifestyle.
* Logic Wealth Planning provides independent financial advice in Manchester, Bury, Rochdale, Cheshire and the surrounding area, but not limited to the region.