Aegon welcomes pensions inquiry

As part of this it is exploring how self-employed people can best be encouraged and supported to save for retirement and whether they should be required to enrol in a pension.

Steven Cameron, Pensions Director at Aegon said: 

“We welcome the Work and Pension Select Committee focussing on pensions for the self-employed and gig economy workers. Unless more is done here, we’ll see a gaping pensions divide between this growing sector of the workforce and those employees who benefit from automatic enrolment into a workplace pension with an employer contribution.

“Automatic enrolment is founded on the Government’s belief that it is in everyone’s interests to pay into a private pension on top of the state pension. Employees need take no personal action but instead are automatically included in their employer’s pension scheme, which is bringing millions of extra employees into workplace pensions. We now need to find an equivalent for the growing number of self-employed.

“The self-employed are no longer made up solely of the traditional small business owner but now include a fast growing contractor population. The differentiation between employed and self-employed has been further blurred by the gig economy and the recent ruling that Uber workers should be treated as employees. This means current Government pension policy is simply unsustainable.
 
“It’s all too easy for individuals to defer starting saving for retirement even if they know it’s the right thing to do. With employer help, auto-enrolment makes retirement saving the default for employees. The challenge is finding an equivalent ‘inertia’ solution for the self-employed.

“For those working as contractors for larger employers, this might be facilitated through the employer. For others, the tax or National Insurance system would seem the most practical means of channelling contributions into pensions by default.”