Just one in ten self-employed workers paid into a personal pension plan in 2013/14, according to an analysis by pension firm Prudential of the most recent data made available by HM Revenue & Customs (HMRC) and the Office for National Statistics.
This is a sharp drop on the 2001/02 figure of 34 per cent. In that year, 1.1m self-employed workers made pension payments and the total value of their contributions was £2.5b. Twelve years on, only 420,000 self-employed workers were making pension payments, and the total value of contributions was only £1.6b. This is despite the fact that the number of self-employed workers is at a record high of 4.6m, and leaves more than 4m workers without adequate arrangements for their retirement.
A 2014 survey, also by Prudential, indicated that the main reason for failing to contribute to a pension plan is affordability. More than half (57 per cent) of self-employed workers either don‘t have enough money or put other financial priorities ahead of pensions, with 9 per cent preferring to plough any spare case back into the business.
With thanks to The Voice magazine, March/April 2016