Self-employed struggle to save for retirement

24 June 2014

More than two-fifths of self-employed people have no retirement savings, research by Prudential has revealed.

The survey of more than 2,200 people found that 43% of self-employed people are without a pension while just 17% regularly contribute to one.

The main reasons for not saving into a pension:

  • 57% said they cannot afford to save into a pension 
  • 16% said they have chosen not to save into pensions, or are planning to use their business to fund their retirement 
  • 9% reinvest spare money back into their business instead of saving 
  • 6% don't expect to stop working. 

When asked about their future saving plans:

  • 52% said they don't have plans to start or resume saving into a private pension 
  • 27% will start or restart their retirement saving a fifth said they didn't know.

Stan Russell, retirement income expert at Prudential, said:
"The financial pressures of starting and growing a business often means that spare cash is hard to come by.
"Focusing on day-to-day finances is second-nature for those who are self-employed. However, not considering or planning for the longer-term is a risky approach, especially if those who own their own businesses don't want to end up having to work past their ideal retirement age."

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