If you’re self-employed please make sure that you are getting financial advice, especially about your pension.
That’s the advice from provider AJ Bell, according to the latest market data which shows that 3.5 million self-employed workers are not making any savings contributions into a pension scheme. That’s shocking and is going to lead to serious hardship in retirement for millions. Figures show that by the end of 2018 only 14% of self-employed workers were saving into a pension, compared with 48% who were saving into a pension back in 1998. That’s a massive fall of 32% (or two thirds over the last 20 years). That’s set against a background of a significant increase in the numbers of self-employed workers at the same time, increasing from 3.4 million in 1998 to 4.9 million in 2018.
These figures are for the period for the 20-year period from 1998 to 2018, so they don’t account for the impact of the Covid-19 crisis. Latest figures from Hargreaves Lansdown indicate that 25% of pension savers have either stopped paying or reduced their pension contributions during the crisis. That will only compound problem and increase the numbers not contributing into their pensions.
Its not just the self employed and their pensions which are under threat. Latest research from Premium Credit shows that almost 20% of people have cancelled or cut their insurance policies since the pandemic began. This includes protection policies like life cover and health insurance. Again, very worrying as many of these policies are there to protect mortgage payments and in the event of redundancy which is a very real threat now for many people.
Please speak to your Pension Adviser to make sure your arrangements are right for you.