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
The Covid-19 vaccine is currently being rolled out across the country, with the government identifying key vulnerability groups to vaccinate first. This includes many people who lack mental capacity to understand what Covid-19 is and whether or not they should have the vaccination.
Another day, another story of how a DIY will has been through the courts and has been successfully overthrown. Whilst the temptation might be there to try and cut corners, it really isn’t worth the financial or emotional heartache for those left behind.
More blog posts from this sector
As the UK eagerly tuned in to the most anticipated Budget for a generation, many were left wondering what the Chancellor’s traditional “rabbit out of a hat” might contain - especially as several big measures had been announced beforehand.
19 February 2021. The UK Supreme Court has issued its judgment in the highly anticipated case of Uber BV v Aslam, in which the key issue was the employment status of Uber drivers. The ruling reinforced the findings of earlier legal challenges (most recently the Court of Appeal in 2018), which found that Uber drivers are workers and not self-employed.
As new variants of the coronavirus are emerging and the pandemic continues, employees will continue to take sick leave due to testing positive for the coronavirus and/or being required to self-isolate.