Self-employed? You might want to think about how you will fund retirement

Self-employed? You might want to think about how you will fund retirement

According to recent news, the average self-employed worker faces working until they are 79 to secure a big enough pension pot to support them in later life.

It seems this is down to a number of reasons. Mainly, self-employed workers are less likely to have a pension pot due to running budget businesses on a shoestring. Freelancers come off worse – according to the article, which quotes research from a financial planning app, 80% of freelancers said it was more difficult to plan for retirement than full-time employees because of unpredictable income patterns.

There also seems to be a broad lack of awareness as to any shortfalls in retirement saving. Research by the Pensions and Lifetime Savings Association revealed that just 50% of freelancers are confident they are saving enough money each month for later life. This compares to 80% across the full-time employee workforce.

However, something has to change – with 4.8million people in the UK being self-employed, this is around 15% of the workforce. What’s more, it is mainly young people driving this self-employment as they become attracted to flexible working patterns and being their own boss. It could mean that we face a generation that has limited retirement funding, which could be a huge burden on the taxpayer in years to come. Particularly, at the current rate of saving, young self-employed workers will fail to reach their desired pension pot by more than a decade – meaning they could be more likely to retire in their 70s, compared to today’s average age of 64.

With huge numbers now declaring self-employed status, now is the time to be thinking about how you might fund your retirement. If you would like some advice relating to retirement planning, managing your estate, or indeed any other aspects of planning for later life, such as wills or lasting powers of attorney, contact Downs Solicitors to see how we can help.

More blog posts from this author

When does £7m leave you disinherited from a will?

In the past, we’ve written many blogs about the trials and tribulations surrounding wills and disinheriting direct descendants. But, what about circumstances where you chose to leave an amount which is a small slice of a large fortune - even if that slice is still worth £7m?

Who will pay my dad’s bills if he is unable to?

My father has recently been diagnosed with early onset dementia. My brother and I have been very supportive, but this news has been devastating for us all. I know I need to get my dad’s affairs in order, but I’m not too sure where to start. Is it possible for him to appoint someone to make decisions on his behalf?

Q&A: Can you clear a £100,000 inheritance tax bill without selling up?

My parents’ house was left to my brother and I, but due to the size of the estate we were liable to pay a hefty tax bill of over £100,000.  We are unfortunately not able to pay a bill of this size through our savings and we’d ideally like to keep the house and rent it out, so we would rather not sell if we don’t have to. 

More blog posts from this sector

With the latest Government advice - Do I still need work from home?

The Government’s roadmap identified that until England reached Step 4 of the Roadmap, employees should work from home where they can. As we are aware Step 4 has been delayed from 21st June to 19th July 2021 and therefore, employers should continue with home working wherever possible until the 19th July.  

Changing an employee’s terms and conditions is challenging both from a legal and trust perspective.

British Gas has been in the media over recent weeks due to the “fire and rehire” approach with their employees.

What are restrictive covenants and why do I need them?

I own a start-up which grew very quickly and a few years ago I hired in a couple of senior personnel to help run the business. After 5 years, one of these senior hires is now leaving the business and going to a company which isn’t a direct competitor but operates in a very similar field.

Our Team

Meet all of the team at Downslaw


15A High Street
KT11 3DH

T: 01932 589599
F: 01932 505087

DX: 46102 COBHAM


156 High Street

T: 01306 880110
F: 01306 471230



The Tanners
75 Meadrow

T: 01483 861848
F: 01483 431965