What is the self-employed pension crisis?

Did you know that 45% of freelancers aren’t putting money towards a pension? 

The data, which was provided by IPSE (the Association of Independent Professionals and the Self-Employed) and CMME Contractor Wealth, has sparked concerns amongst the self-employed community and the government is being urged to address the issue before the next election. 

Of the 45%, 15% said they don’t have a private or personal pension, while the other 30% suggested they had an existing pension but not one that was in use. 

Why are the self-employed not saving for a pension?

When asked why they were not actively putting money away for retirement, the participants gave the following reasons:

1. Other financial priorities (34%)
2. Affordability (24%) 
3. Ceasing contributions to a pension after becoming self-employed (24%) 

Andy Chamberlain from IPSE, said: “Successive Governments have ducked the issue of self-employed savings for years, but the crisis is now too big for a future Government to ignore. It will likely require intervention of a magnitude similar to automatic enrolment for employees.

“Pensions aren’t the only option for those saving for later life. Some self-employed people may find other methods of saving more attractive if they were better suited to volatile incomes; the Lifetime ISA is one example, and IPSE has called for it to be revamped to better serve independent workers.

“With an election little over one year away, political parties with ambitions for Government must get to grips with this challenge now and be unafraid to propose bold, radical solutions in their bid to win the backing of the self-employed.”

How do pensions work under an umbrella company? 

In most instances, you will automatically be enrolled into a pension scheme when working with an umbrella provider, as they are now technically your full-time employer. 

Here at Mint, all of our candidates are eligible to opt-in (and out) of our pension scheme at any point. Get in touch with our team via [email protected] to find out more or give us a call today on 0203 967 6846.