A lack of savings among the self-employed runs the risk of becoming the next big pension scandal, according to AJ Bell.
Figures from HM Revenue & Customs showed self-employed pension savings levels hit record lows in 2019/20.
Self-employed workers contributed £830 million to pensions during the year, down from over £1 billion in 2018/19, with AJ Bell warning that the latest figures are likely to be even lower as a result of the pandemic .
Tom Selby, head of retirement policy at AJ Bell (pictured), said: “Given the number of self-employed workers has been spiking over the last two decades, the fact the amount being saved in pensions has fallen dramatically among this section of the labour market is both counter-intuitive and extremely worrying.
“While automatic enrolment has been successful in boosting pension saving among employed workers it does precisely nothing for the self-employed. The Government has previously promised to extend the principles of auto-enrolment to the self-employed but so far we have seen little by way of progress.
“Without a nudge into a pension scheme and a matched contribution it is hard to see how policymakers can dramatically move the dial on self-employed retirement saving.”
According to Selby, without Government intervention to boost savings levels among the self-employed, millions of people could face a retirement disaster in the not-so-distant future.
Selby added: “At the very least, a communications drive to emphasise the importance of retirement saving among the self-employed and the dangers of doing nothing is urgently needed.”
