As the UK’s self-employment boom continues, more and more analysis of this newly-important group is being conducted by institutions up and down the country in an attempt to understand the working realities for freelancers and contractors. Are they there by choice, or due to a lack of decent employment options? Is the sudden surge in business ownership a ‘temporary blip’, or the new norm? Whatever the reasons, the everyday problems faced by freelancers and contractors are suddenly becoming national issues, and this morning a new study from the Resolution Foundation has found that as many as two thirds of the UK’s 4.5 million self-employed professionals have made no retirement provisions whatsoever.
More than half of permanent employees currently pay into a pension, and auto-enrolment means that within a few years all will be saving for retirement – however sole traders have no such obligation, and can continue paying nothing towards their retirement if they so wish. Amongst all the UK’s self-employed, just 34% are paying towards a pension. Even amongst those nearing retirement age (in their 50s and 60s) the figure rises just a few percentage points, to 39%.
The Resolution Foundation’s Conor D’Arcy, co-author of the research titled “Just the Job or a Working Compromise? The Changing Nature of Self-Employment” (launching at an event in London this morning), said:
“It seems there’s a growing appetite for self-employment which is not deterred by the financial difficulties that can go with it. Of course, lots of self-employed people are secure and comfortable, but there’s worrying evidence that some are financially vulnerable because of the specific problems a self-employed person can have in getting mortgages, credit or tenancies and in providing for their retirement.”
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