New evidence suggests contractors are failing to save for retirement
A new survey has found that many contractors are shunning pension savings as the country sees a 12 per cent rise in traders who are failing to save for retirement.
Of the 1,000 self-employed people interviewed, around two-thirds of the respondents admitted that they avoided paying into a personal pension scheme.
If this number is extrapolated nationally, it could mean that as many as 2.9 million of the UK’s 4.5 million contractors may not be saving for retirement.
It is thought that the uncertainty around self-employed work and the risk of extended periods of time between contracts is the main reason why many contractors do not want to tie their money up in a pension that they cannot access tax-free until the age of 55.
Last year, the Taylor Review which looked at zero-hour contracts and self-employed workers, identified this as an issue and suggested several recommendations, but these have not made it into the Government’s current Good Work Plan.
The survey also found that workers aged between 31 and 40 are the least likely to be paying into a pension scheme, with just 44 per cent currently contributing to one.
In comparison, nearly 60 per cent of 41-50-year-olds were making savings into a defined contribution scheme.
Unsurprisingly, due to this lack of saving, almost 59 per cent of freelancers expect to continue working past the age of 64.
We have developed a close relationship with M & N Insurance so that you can draw on their experience and expertise to meet all of your pension requirements.
Please contact Jeremy De Lord on 020 8952 2234 for further details. You may receive preferential rates from M & N Insurance if you are a client of Cogent.