The latest government figures show that the number of self-employed people in the UK is at a record high with 4.6 million – 15 per cent – of the UK workforce working for themselves. The number of self-employed people has increased by 732,000 since the first quarter of 2008. However, Prudential’s research found that just 17 per cent of self-employed people regularly contribute to a pension while another six per cent make ah-hoc contributions.

The main barrier is affordability. More than half (57 per cent) claim that they have other financial priorities or simply cannot afford it, with a further 16 per cent planning to rely on their businesses to fund their retirements. Six per cent say they don’t plan stop working. And nearly one in 10 choose to reinvest any spare money back into their businesses.

Equally, there is very little appetite for saving in the future among the self-employed, with 52 per cent admitting to having no plans to start saving into a private pension, or resume pension payments. Only 27 per cent will start saving, or restart saving, with 20 per cent remaining undecided. The problem is more prevalent among younger workers.

Stan Russell, retirement income expert at Prudential, said: “The financial pressures of starting and growing a business often means that spare cash is hard to come by. Focusing on day-to-day finances is second-nature for those who are self-employed. However, not considering or planning for the longer-term is a risky approach, especially if those who own their own businesses don’t want to end up having to work past their ideal retirement age.

“Pension reforms that are due to come into effect in April 2015 will increase the flexibility of pension saving, but the onus is still very much on individuals to save as much as possible from as early as possible.”