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10 May 2017

Majority of the UK´s self-employed don´t have a retirement plan

The UK lags behind most of the world when it comes to retirement planning among the self-employed.

New research carried out by insurer Aegon in 15 countries reveals that only 44% of self-employed people in the UK have a retirement plan, compared to 60% globally. And only one in ten have given enough thought to the matter to write it down.

As Aegon points out, not formalising a retirement strategy makes it difficult for individuals to assess whether or not they´re on track. This has contributed to over half, 52%, projecting that they´ll still be working after they reach 65.

If they were unable to continue working before reaching their planned retirement age, just 29% have a backup plan to provide them with an income.

What´s more, only 20% are confident they will have a comfortable lifestyle in retirement — highlighting the need for support and advice for the self-employed to help them plan.

Commenting on the findings, Kate Smith, head of pensions at Aegon, said:

“A growing trend towards self-employment represents not only a change in how 4.6 million people work in the UK, it also means changes in how people save and plan for retirement. Without employer-sponsored plans, the self-employed are flying solo when it comes to pensions. Achieving long-term financial security and peace of mind in retirement requires a rigorous approach to saving and proper planning.

“The self-employed may have concerns about their ability to retire, but few are doing anything meaningful to address the issues. With all the day-to-day pressures involved in working for themselves, many find it difficult to make plans, but taking time to write a pension plan brings many benefits, not least making it immediately tangible.

“Writing down a retirement plan brings it to life, making it more likely they will act on it. It also allows them to refer back to it and share it with their partners, or even get input from others, including advisers — that´s difficult to achieve if it´s just in your head. If it´s not written down it´s only ever going to be a virtual plan and not a meaningful plan that can help keep you on track.”

Copyright © M2 Bespoke 2017

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