Will There Be A Self Employed Pensions Revolution?

7 December 2016

pensions-revolution Are we going to see a pensions revolution for self-employed workers? There has been mounting pressure on the government from all angles including politics and pensions industry experts to avert a potential pensions crisis who have until now been excluded from many of the government's flagship pensions policies.

In the last week, the government's Work and Pensions Select Committee have launched a formal consultation into the issue of self-employed workers benefits where a plan to somehow enrol them into pensions through the hugely successful auto enrolment scheme.

Auto enrolment has resulted in millions more people saving more for retirement and overall has been a massive success, with less than 10% of those being auto enrolled taking the option to opt out of the scheme.

Richard Harrington, the government's pensions minister speaking about the review said:

"It is clear automatic enrolment is playing a key role in shaping the retirement landscape for generations to come. However, I want to build on this success and will be looking at how we can get even more people saving, and saving more."

Frank Field, chair of the Work and Pensions Committee, said, "The welfare state was created in an era when relatively secure long-term full-time employment and traditional families dominated. The labour market is changing very quickly: self-employment, uncertain hours, insecure short-term contracts and gig work are becoming ever more prevalent. We will be investigating the extent to which the welfare system can adapt to these challenges and what may need to change."

This comes in light of another review being led by John Cridland CBE, independent state pension age reviewer; he too has identified pensions for the self-employed as being a key concern in his review of the state pension:

"The self-employed are one of around half a dozen groups I have identified as key to state pension age changes. This is unsurprising as they tend not to have significant savings. However, there is a big difference between those who sell their business and have golden egg – and those with just a limited income, and we are doing more research into this before releasing the final recommendations in March."

The deadline for written submissions to the Work and Pensions Committee is 16 January 2017.

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