Since 2001 the number of self-employed has risen from around £3m to £5m today. This is great but at a time where the self-employed are not yet compelled to save by auto-enrolment, and the financial capability of individuals remains in question, experts have highlighted the possibility of an ‘impending pensions crisis’ for this growing sector of the UK labour force.
With no employer to fall back on, the self-employed are on their own when it comes to retirement saving. Irregular income patterns can make it harder to save regularly into a pension and commit to locking money away until age 55. Those who are building a business may see that as their biggest asset and prefer to invest in it rather than a pension. However, there is a growing feeling that something must be done to help the self-employed save for retirement. The Office for National Statistics (ONS) recently published figures on the wealth and savings of those in self-employment and they make pretty grim reading.
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The value of investments can go down in value as well as up, so you could get back less than you invest. It is, therefore, recommended that you seek full, personal advice in respect of your needs where all appropriate risks will be explained.