Trade body says self employed should not be automatically enrolled
26 June 2018
According to figures published by The Office of National Statistics, there are now about 5 million self-employed workers in the UK and less than a third of these are saving into a personal pension scheme.
The Association of Independent Professionals and the Self-Employed (IPSE) has suggested that instead of auto-enrolment the self-employed should be offered Nest’s ‘sidecar' account initiative.
Instead of all contributions been put in a pension pot, this splits contribution between a pension pot and a “rainy day” fund. The sidecar is currently being designed with a focus on the workplace. However, Will Sandbrook, executive director of Nest Insight, did not rule out conceiving a similar model for the self-employed and trials are to begin later in the year for the workplace.
Following a survey by IPSE, it was found that thirty-six per cent self-employed would remain in a scheme after having been auto-enrolled, twenty-five per cent would opt out, while 38 per cent said that they did not know how they would respond to auto-enrolment.
Tom Purvis, economic and policy adviser at the trade body said, “What this shows is just a general lack of enthusiasm for automatic enrolment.”
From the survey 31 per cent of self-employed workers want “a flexible pension solution designed specifically for the self-employed”. Nest’s ‘sidecar’ could be the solution.
Read more from Pensions Expert.