Saving for later life
What are the issues?
There is growing concern about the lack of saving for later life among the self-employed. It is serious worry not just for the self-employed themselves, but the Government and pension providers too.
At present, just 31 per cent of self-employed people are paying into a pension while 67 per cent are concerned about their savings for later life.
We are working with the Government and pension providers across the country to address this issue and secure better pension support for the self-employed.
What we are doing:
IPSE used nationally representative research by ComRes - which comprehensively analysed the attitudes of over 1,000 self-employed people - as well as a broad consultation with the industry and Government in a landmark report: ‘How to solve the self-employed pensions crisis’.
The report highlighted the the diversity of self-employment and the need to produce a broad and tailored series of solutions to ensure we avoid the self-employed saving crisis.
The report put forward the following recommendations:
- Support rolling out the sidecar pension scheme to the self-employed, allowing them to save for later life and also into a separate ‘rainy day’ fund for emergencies.
- TheMoney and Pensions Service should provide tailored advice on how the self-employed can save for later life. (IPSE research found 51 per cent of the self-employed trust Government websites for guidance, making it among the most trusted sources of advice).
- Pension products should be more user-friendly and engaging and the terms of a policy need to be clearly and accessibly set out. Language should be used that is accessible to all.
- Provide open access to a free mid-life MOT, connecting older self-employed people with advisors to assess financial health and identify where to make interventions to improve their savings.
- Universities, schools and pension providers should work together to provide financial education for younger people.
- The Government should not introduce Automatic Enrolment for the self-employed, given both the barriers highlighted in its recent review and IPSE’s research showing many self-employed would opt out of it.
Our work with the Department for Work and Pensions
Following the Government's committment to improve pension take up by the self-employed, IPSE successfully secured a position on one of the Department for Work and Pension's (DWP) research trials. The trial will test marketing messaging with our members using a variety of different messages, testing which prove more affective in engaging self-employed people with saving into a pension. IPSE will update on progress as results come in.
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