3 January 2019
Since pensions auto-enrolment was introduced, more than 10 million workers have been automatically enrolled into a workplace pension by their employer, with only 9% of those enrolled choosing to opt out.
But self-employed people are much less likely to be paying into a pension scheme, and will therefore be relying on just the State Pension when they retire. With over half the people working in hair and beauty now classified as self-employed, this means living on a maximum of only £164.35 per week, and even this depends on having made full National Insurance Contributions.
The government released its strategy for retirement savings for the self-employed in December. It includes a series of trials to test out the best ways of encouraging the self-employed to save for their retirement, mostly through marketing messages promoting the importance of saving and providing links to suitable savings schemes.
Much stronger action on pensions for the self-employed
Hilary Hall, NHBF chief executive, said, “Much stronger action on pensions for the self-employed is urgently needed if we are to prevent a looming pensions crisis affecting half the people in our industry. We have been calling for some form of pensions savings scheme, administered through their tax returns, which all self-employed people are opted into. They could opt out if they choose, for example if they’ve already made provision for their pension. While raising awareness of the need to save is important, concrete action is needed to make sure pensions are seen as a priority.”