With more and more people now saving for retirement thanks to auto enrolment, the Association of Independent Professionals and the Self Employed (IPSE) have highlighted the fact that many self employed people (who are not covered by auto enrolment at the moment) are not preparing for their retirement on the same scale as those who are.
This comes as employees across the UK saw a 1% increase in their contributions, this small increase potentially giving them significant gains in the future.
According to Jonathan Lima-Matthews, senior policy advisor at the Association of Independent Professionals and the Self Employed, auto enrolment has been one of the most effective of the government's policies over the last few years. Introduced in 2012, and has already helped more than three quarters (78%) of employees start saving for their retirement. However, he says, "there's a flip side." Although most employees were currently saving for retirement, a corresponding proportion of the self-employed were not. At last official count in 2016, only 17 percent of all self-employed people were paying into a pension."
This is clearly a worrying statistic, but one that looks like the government is working on says Lima-Matthews.
"In December last year, it published its Automatic Enrolment Review 2017 which went some way toward addressing the problem of low pension uptake among self-employed people, a category that includes many contracting professionals who work via their own limited companies."
"Considering the self-employed population is diverse and is subject to different constraints, such as fluctuating incomes where employees are not, IPSE has made it clear that there is no one-size-fits-all approach to this."