Surge in self-employment 'stoking the pension crisis', warns Prudential

Its study found more than two fifths (43%) of those working for themselves admit they do not have a pension, compared to just 4% of those in employment.

Self-employed workers now make up 15.1% of the UK workforce with more than 4.8 million people working for themselves.

Around one in three (31%) say they will be relying entirely on the State Pension worth around £8,545 a year to fund their retirement, while 28% will be reliant on their business to provide the income they need.

Self-employed workers are savers – but the research found they are more focused on day-to-day emergencies than the long-term of retirement.64% of self-employed workers save to build up a safety net in case of an emergency in comparison with 57% of those in employment.

Just one in 10 self-employed people see a financial adviser regularly, despite having potentially more complex requirements than someone in employment. One in five (19%) are not confident with money and financial matters, while a quarter (24%) worry that they do not know enough about money.

20% admit they do not take pension saving seriously as they do not think it applies to them.

Kirsty Anderson, retirement income expert at Prudential, said: “Saving for retirement is tougher when you are self-employed 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.

“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."