Nest puts spotlight on pensions for the self-employed
Half (50 per cent) of self-employed workers aren’t confident about how they will fund their retirement, with a similar number (55 per cent) saying they would welcome more guidance on how to best save for retirement.
The figures come from Nest Insight’s Supporting self-employed people to save for retirement report.
A key issue is that although auto-enrolment has proven to be very effective at helping traditional workers to start saving for retirement, the current auto-enrolment framework isn’t suitable for self-employed workers as there is no employer to enrol them into a scheme.
Nest Insight is working with the Department for Work and Pensions to explore and test different approaches to see what might work to enable increased long-term savings among self-employed people.
The first report to come from the project looks at the attitudes and behaviours of self-employed people around retirement saving, how to communicate with them about saving for later life, and practical ways of enabling them to do so more easily.
The next stage of the research programme will include field-based trials to test the ideas developed in the exploratory stage.
Nest Insight is also preparing two or more technology-based trials in partnership with providers of platforms used by self-employed people to manage their money, with initial findings due to be released next year.
Jo Phillips, Nest Insight head of research and innovation, said: “Although most self-employed people say they want to save for retirement, many struggle to do so in practice. Encouragingly most are open to help, guidance and encouragement to get on track with saving for later life.”
“We know that self-employed people are a highly diverse population and it will be tricky to find a one-size-fits-all approach. By asking self-employed workers what they want, we’ve taken a significant step forward to discovering what those solutions might look like.”
“We know that control and adaptability to changing circumstances are really important for self-employed people, as is some element of access to their money in case of need’, often due to the varied pattern of their income. We’re currently exploring opportunities to build in simple and easy ways to save within the personal finance and accounting platforms they already use, and looking at how to communicate more effectively with self-employed people via the channels they’re turning to most frequently for financial guidance and advice.”
Guy Opperman, minister for pensions and financial inclusion, said: “We want to boost the future prospects of millions of hard-working self-employed people, including younger and lower-paid workers, and that’s why we’re trialling various approaches which could help them plan ahead financially for later life.”