Self-employed three times more likely to not pay into pensions

More than two out of five self-employed don’t contribute to a pension compared with employees

Our latest research* shows that self-employed workers are nearly three times more likely to not be paying into pension funds compared with employees. The nationwide study found 44% of self-employed workers are putting their retirement at risk by not contributing to a pension compared with 15% of employees.

Our research shows that pension consolidation could help both contractors and the self-employed address the shortfall in their contributions. The study found 11% of the UK’s 4.25 million self-employed** would increase pension contributions if they consolidated funds into one while another 17% say they would make more regular contributions. Less than one in 10 (9%) say they have already consolidated funds into one.

Many self-employed people already have multiple funds built up during periods as employees – our research found one in three (33%) have multiple funds while one in 10 say they have three or more pension funds.

The research found self-employed workers find it difficult to contribute to pensions – around two out of three (64%) would support Government action to make it easier to contribute.

Here at iSIPP we have launched a new contributions feature helping individuals to maintain pension savings, enabling the self-employed and contractors to make regular or ad-hoc payments and also to allow employers to contribute.

Customers can sign up easily here and transfer their existing pensions, consolidate funds into one pension, choose their preferred investment funds, and monitor how they are performing 24/7 online, with complete transparency on fees and charges.

To make contributions they log in to their iSIPP account and select the frequency and value of payments. They can choose to invest directly or we can invest on their behalf through a range of ready-made funds.

Our Create option available here, provides over 100 funds classed as standard assets as per the FCA guidelines, with investors having the flexibility to access the investment platform through their iSIPP account.

The free to set up service has no dealing charges or charges to transfer in existing pensions and enables clients to create their own portfolio complementing our existing ‘Choice’ range of Ready-Made funds from world-leading fund managers BlackRock and Schroders.

iSIPP Managing Director Hrishi Kulkarni said: “Self-employed workers not contributing to pensions is a major issue and at the same there are more than 4.25 million people who count themselves as self-employed according to Government data and as such there is strong demand for solutions that suit them.

“Consolidating existing pensions with iSIPP would give them better control of their overall pension as they would have better visibility of their investment performance, manage investments to suit their retirement goals, saving them on administration time and fees, and crucially enable them keep on contributing no matter what changes with their employment status.”

Our digital pension consolidation service is available to all customers with UK pension funds who are working or have worked in the UK. Our Choice range include Ready-Made Portfolios from world-leading fund managers BlackRock and Schroders. BlackRock’s multi-asset, risk-managed MyMap range of funds are available which include an ESG fund and iSIPP also provides access to the Schroders’s Shariah compliant fund. Focusing on transparency, the annual trust fee is £200 plus a 0.25% platform services fee. Funds with OCF (Ongoing Charges Figure) start at as low as 0.16%.

*  Study conducted by independent research company Opinium among a nationally representative sample of 2,000 UK adults aged 18-plus between March 1^st and 3^rd 2022 using an online methodology

** https://www.statista.com/statistics/318234/united-kingdom-self-employed/

Disclaimer 

The content of this article is for general information purposes only and should not be construed as legal, financial or taxation advice. You should not rely on the information contained in this article as legal, financial or taxation advice. The content of this article is based on information currently available to us, and the current laws in force in the UK. The content does not take account of individual circumstances and may not reflect recent changes in the law since the date it was created. It is essential that detailed financial and tax advice should be sought in both jurisdictions and any legal advice, if required.

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