The Department for Work and Pensions (DWP) released their report into automatic pension enrolment which proposes that a number of different ‘interventions from 2018’ will be tested to identify the best solution for the self-employed workforce.
The government is aiming for workers to save whilst working, to ensure security and independence after retirement. By 2019/20, it’s estimated that an extra £20 billion will be put aside every year into workplace pensions as a direct result of automatic enrolment.
The Secretary of State for Work and Pensions, said in the report, “As per our manifesto commitment on the self-employed, the government’s aim is to use the principles and learning of automatic enrolment to improve pension participation and retirement outcomes among self-employed people.”
Research led by IPSE, the Association of Independent Professionals and the Self-Employed, recently found that 37% of IPSE members don’t have a pension, while 16% don’t save for retirement at all.
In a bid to tackle the self-employed being under pensioned or pension-less, IPSE welcomes the DWP auto-enrolment review. Jonathan Matthews, IPSE’s Senior Policy Advisor, said,”This review is a definite step forward in the Government’s approach to pensions for the self-employed. Not only does it acknowledge the true diversity of the UK’s self-employed community; it also accepts that one-size-fits-all solutions simply will not work.
“The report acknowledges that among the self-employed, while some groups have made provisions for later life, others need targeted interventions to get them saving. DWP has done the right thing by deciding to take the time to try different solutions to fit this hugely varied sector. IPSE will continue its work in this field, sharing the results of our own research as soon as they are available.”
As a contractor, it may prove difficult to contribute towards a pension due to the nature of the working style, but different paths are being explored to help make this easier. Read ‘plans to help self-employed roll in pension savings’ for more information.
At Gorilla Accounting, we work with various specialist pensions providers to deliver regulated pensions advice. For more information, ask a member of our New Business team on 0330 024 0406.