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Almost two in three self-employed people have no pension savings

The level of pension saving among self-employed people in the UK is relatively low, and many would welcome a form of automatic enrolment.

That's according to Fidelity International's new report, Generation Self-Employed, which explores how the self-employed are managing their personal finances and their attitudes towards saving and investing.

The survey of 1,032 employed people and 1,028 self-employed people found that nearly two-thirds of those who are self-employed (62%) currently have no form of pension savings. By contrast, only 32% of employed people currently have no pension savings.

What's more, over a quarter (28%) of self-employed people said they are not saving anything for their future on a regular basis, compared with one in eight (12%) of those who are employed. Seven in ten (70%) self-employed people who are not saving for their future said that they simply cannot afford to save for their retirement. And only a third (32%) know what a Self-Invested Personal Pension (SIPP) is.

Almost half (49%) said they would welcome government rules that would automatically enrol them in a scheme to save for their future.

"It is evident that many people in self-employment are leaving their financial futures too much to chance," commented Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International.

Although being your own boss is hard work, and more pressing matters often get in the way of planning for your financial future, there are some simple steps that self-employed people can take.

"SIPPs for example are a great way of saving for the future," Montgomery explained. "The government will give you a basic rate of 20% tax free relief on anything paid into your SIPP up to the lower of 100% of your earnings or your annual allowance (£40,000 for most people). If you are a higher rate taxpayer, you can claim additional tax relief.

"Putting your business first is one thing but you shouldn't let your personal financial goals be forgotten along the way, especially when small changes can make a big difference."

Posted on May 10th 2019

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