Pensions too costly for self employed

Two-fifths of people who are self employed do not have a pension, a report has claimed.

This compares to just 4 per cent of those who work for a company, according to research from Prudential.

Around one in three self employed workers say they will be relying entirely on the state pension worth around £8,545 a year to fund their retirement, while 28 per cent will be reliant on their busi- ness to provide the income they need.

More than a third of those whodonotsavetowardsapension said it was because they could not afford to do so. One in five say they are not confident with money and financial matters, while a quarter worry that they do not know enough about money.

Kirsty Anderson, retirement income expert at Prudential, said: “Saving for retirement is tougher when you are selfemployed as there is no one to organise a pension for you and no employer making contributions on your behalf.

“On top of that self-employed workers often don’t have a regular income so many will focus on setting aside money as a safety net if they cannot work.”

She added: “Saving for a pension is still important as no one wants to work forever and no matter what your employment status, having money to fund your retirement is essential as the state pension is unlikely to be enough to fund a comfortable retirement.