Self-employment poses future risk

Federation of Small Businesses

The UK's dramatic shift towards self-employment could be storing up long-term retirement problems for the future, the Federation of Small Businesses has warned.

A recent report from the FSB found that only 31 per cent of self-employed people are saving into a private pension, with 15 per cent suggesting they do not have retirement savings of any kind.

A quarter of self-employed people said they plan to rely on their business to fund their retirement, although with many of them earning low incomes this is unlikely to be a viable solution for all of them, the FSB said.

Now the organisation is urging government ministers to work towards a savings policy for the self-employed, who are not currently being catered for by automatic enrolment, the government programme placing millions of employees into workplace pensions saving.

Mike Cherry, the FSB's national chairman, said: "It has never been easier to go it alone into business, and self-employment now stands at its highest level. This should be celebrated because it brings freedom and flexibility to millions.

"However, in a whole range of areas, the self-employed are akin to round pegs in a system built of square holes. Their ways of working don't fit with the support frameworks in place. Many are being shut out of financial services like mortgages or personal insurance because they don't fit the usual mould. More must be done to support them."