2012 saw the start of auto-enrolment for all permanent employees, with the majority enrolled and contributing to their future pension pots by April 2017. The successful implementation of this scheme saw over 10 million UK workers and employers opting into pension contributions. With an ageing population and ongoing fear over the “pension timebomb” the necessity to enforce payment contributions from both employees and employers was paramount in ensuring UK government stability of being able to provide for those that have retired.
As successful as auto-enrolment may appear there is still the issue over the self-employed. It is currently believed that only 1 in 4 self-employed people are actively putting money aside for their future pension, which means over 3,000,000 UK workers are still not contributing or saving for their retirement. With the government attempting to intervene on the matter on several occasions, such as a rise in National Insurance contributions and a 2017 call for consultations on the matter, not much has been done to help encourage those that are self-employed to save towards retirement.
It is understood that the self-employed marketplace can be more volatile compared to those that are employed. With many self-employed workers saving for future events, such as a downturn in work, as opposed to retirement. Their focus is on ensuring a level of certainty in monthly income through managing workloads and being prepared for small gaps between work. So, although the notion of saving is well-versed within the self-employed arena, it is unclear if the use of pension schemes are widely used.
The benefits, if you are self-employed, of opting into a monthly pension scheme is it can help boost your earnings when you retire. The current state pension is £168.60 per week, a considerably lower sum compared to the average weekly take-home of any self-employed person. Without savings or a pension scheme to support you this small sum of money may prevent you from retiring.
So, if you are self-employed and want to know more about how you can better prepare for your future you can contact Bishopsgate to find out more about their umbrella payroll scheme. Umbrella payroll allows you to be employed by Bishopsgate, which will allow you to benefit from being enrolled onto a monthly contribution pension scheme, whilst having the flexibility to manage your workload and commitments. It is an easy and efficient way to ensure you are saving towards your future and retirement.
If you are concerned about how these changes may affect you or your business or if you would like further information, please do not hesitate to contact us on 0203 019 4990 or email us at email@example.com.