Just 4% of self-employed workers save into a pension, SPP finds

Just 4% of wholly self-employed workers were saving into a pension, a report from the Society of Pension Professionals (SPP) found.

The Missing Millions: Rethinking Pension Policy for the Self-Employed stated that millions lacked the default route into retirement saving available to employees through automatic enrolment.

Around three-quarters of UK private sector businesses had no employees other than their owners, leaving many micro-business owners outside the workplace pension system.

The paper proposed using the tax system to create a default saving route and developing flexible automatic saving schemes through banks, accountancy platforms and other intermediaries.

It also proposed default pension arrangements through existing defined contribution master trusts or a state-backed scheme.

Other options included behavioural prompts, micro-saving and targeted support, as well as making pension contributions easier to continue when workers moved from employment into self-employment.

The paper also called for consideration of whether collective defined contribution schemes could provide a route from pension savings to retirement income.

Martin Willis, chair of the SPP’s self-employment working group, said: “Automatic Enrolment changed the default to ensure millions more employees save for their retirement.