A Government-commissioned report into self-employment has rejected extending automatic enrolment in favour of pension products that allow early access to cover time out of work.
In December, Money Marketing reported on growing calls to bring self-employed workers – who make up around 15 per cent of the workforce – into the auto-enrolment regime.
But self-employment review chair Julie Deane says the suggestion “has not been well received by the self-employed”.
She says: “A far more workable and less bureaucratic solution would be the evolution and development of pension products created specifically for the self-employed.
“These would take into account the fluctuations of income and cater for periods when a withdrawal of capital might be necessary. Again it seems that the financial services industry needs to be made aware of the need for more flexible products for the self-employed – a large and expanding market.”
According to Government statistics, less than a third of self-employed people are saving into a pension. Deane says many feel they cannot lock away money because of the unpredictability of income.
She adds: “Accessibility to the pension fund to cover period of not earning would be highly desirable.”
The report also calls for clarification around the legal defintion of self-employment, equalising benefit allowances and including the self-employed in public policy impact assessments.