The Department for Work and Pensions (DWP) has announced trials aimed at stimulating retirement saving among Britain’s 4.8 million self-employed.
New approaches that would allow self-employed people, around 15 per cent of the UK workforce, to save for short, medium and long-term financial goals – for example, catering for those with irregular incomes – will be tested through trials and research to be launched imminently.
Automatic enrolment has transformed pension saving with almost 10 million people automatically enrolled since 2012. Now the government is looking at methods of encouraging the self-employed to put away money for later life.
Guy Opperman, Minister for Pensions and Financial Inclusion, said:
‘Only around 1 in 7 (14 per cent) self-employed people were saving into a pension in 2016 to 2017. Our trials are designed to make sure that this diverse group of people gets help to plan ahead for greater financial security and the lifestyle they aspire to in later life.
We want to see effective, long-lasting solutions that boost the future prospects of millions of hard-working self-employed people, and will work with the financial services sector, professional trade bodies, unions and others to achieve that.’
More information about the trials is available in Pensions and long-term savings trials for self-employed people
This report follows the Automatic enrolment review 2017: Maintaining the momentum. In the review, the Government announced it would carry out trials on a number of different approaches to help self-employed people save for retirement.
The trials focus on three areas:
- Marketing interventions aimed at people who have previously saved – for example, after being automatically enrolled whilst employed – to encourage them to continue their saving behaviour;
- Marketing interventions using trusted third parties for the self-employed, such as trade bodies/unions etc. to promote the value of saving and provide an easy connection to an appropriate savings vehicle; and
- Behavioural prompts – testing messages combined with prompts through invoicing services and/or the banking sector to seek to engage self-employed people to think about starting a regular saving habit at a point when they are receiving income.
As a Self-Employed person you are by nature a self-starter, who has opted to take control of your own time and earnings capacity. You may have taken a risk in setting up your business for numerous reasons, one of which, could be tax savings.
Contributing to a pension has a further tax advantage in that every £100 you personally contribute immediately attracts £25 from HMRC.*
Certain maximum contribution limits do apply.
Using sophisticated Cash-flow modelling tools, the pension specialists at Odyssey Wealth Management can take the ‘guesswork’ out of the equation and help you plan for your eventual and well deserved ‘full’ or ‘phased’ retirement.
Contact us todayto arrange a no obligation appointment
Browse our website
*For a basic rate tax payer, higher rate tax payers can claim back a further 20% through ‘Self-Assessment’. Those earning below the tax threshold can also benefit from the tax uplift up to certain contribution limits each year.
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Levels of tax relief are based upon your own particular circumstances and are subject to change. Workplace Pensions are regulated by The Pensions Regulator.