Small business confidence sees decline in second quarter
Many self-employed people are approaching retirement without a private or workplace pension in place, according to a new report from Aegon.
Data from the latest Aegon Readiness Report has indicated that one in seven people aged 55 to 65 have no means of supplementing their state pension. This rises to 20 per cent among women, compared to 12 per cent of men.
The report highlighted self-employed people or those working within the gig economy as examples of those who were most likely to be missing out, as well as employees who do not meet the earnings or age criteria for auto-enrolment, and individuals who have consciously opted out of a workplace pension scheme.
This is a point of concern, as it was indicated that even those entitled to the full amount from the new single-tier state pension will only receive the equivalent of an income of £8,297 per year, often with no other savings to back this up, while it is usually not possible for spouses to inherit their partner’s pensions.
Although the government’s flagship self-enrolment policy has been largely successful in helping more people to save for retirement – with 7.5 million people having been enrolled into a workplace pension scheme so far – it has been noted on several occasions that the lack of any equivalent provisions for the growing population of self-employed workers could be creating the risk of significant financial shortfalls.
Kate Smith, head of pensions at Aegon, said: “Our findings show how critical it is that the review of automatic enrolment brings more people into its scope and that we find equivalent nudges to help the self-employed and gig economy workers save for pensions as the default.”
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