Self-employed continue to shun pensions
Data included in the current Wealth and Assets Survey showed that three in four self-employed people aren’t investing into a pension. This is higher than previous estimates from the Pensions Advisory Service (Tpas).
Sean McCann, chartered financial planner at NFU Mutual, said: “There are around 3.5 million adults who are missing out on a big helping hand from the government to boost their retirement savings. While auto-enrolment is making it easier than ever for employed people to save for their retirement, many in self-employment put off saving into a pension in favour of investing in their own business.
“The tax relief alone is a great incentive to make pension contributions, but many entrepreneurs don’t realise they can use their pension fund to invest directly in commercial property or land, which their business can then occupy and still benefit from the tax advantages a pension gives. These latest statistics suggest many, many self-employed people may be missing a trick and could be facing having to extend their working lives by years, if not decades.”
Tpas launched a campaign at the end of January designed to address low levels of pension saving among the self-employed. It said business owners often rely on using their business to fund their retirement.
The guidance body’s document Pension saving for the self-employed and small business owners, details the benefits of saving into a pension, how to choose a pension, how to maximise pension savings, and options upon reaching retirement.