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FSB warns of self-employment savings timebomb
THE UK’s dramatic shift toward self-employment could be saving up long-term retirement problems for the future, says the Federation of Small Businesses.
It has found that less than a third of self-employed people are saving into a private pension, with 15% suggesting they do not have retirement savings of any kind.
A quarter plan to rely on their business to fund their retirement, although with many self-employed individuals earning a low income this is unlikely to be a viable solution for all.
The FSB is urging ministers to work towards a savings solution for the self-employed, who are not currently being catered for by automatic enrolment - the government programme which is sweeping millions of employees into workplace pensions saving.
FSB Bedfordshire branch chair Ian Cording (pictured) said: “It has never been easier to go it alone and self-employment now stands at the highest level since records began. This should be celebrated as it brings freedom and flexibility to millions of people.
“Yet policymakers have been slow to respond to the boom in self-employment and are therefore playing catch up. If we do not act now to adapt to this changing workforce, we will only be shoring up problems for the future.
“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 do not fit the usual mould. More must be done to support these workforce pioneers.”
The FSB wants to see the self-employed get better access to business support and financial assistance where it is available. Ministers should take advantage of delays in the rollout of Universal Credit to make it more flexible and responsive to the needs of the self-employed. The current rules are overly complicated, bureaucratic and will penalise many self-employed individuals on low incomes.
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