The UK’s ever growing army of self-employed workers are walking into a pensions nightmare if they don’t take action to address the problems soon, according to the Daily Telegraph.
Recent figures from the Office for Budget Responsibility show there are now 4.5 million UK individuals who are self-employed, with the number growing rapidly in the years following the Credit Crunch which hit in 2008.
Those workers missed out on the auto-enrolment reforms which have seen millions of employees starting pension savings for the first time and, due to low pay or lack of information, are not contributing to a pension scheme from their self employed earnings.
Research by the Prudential estimates that self-employed people who miss out on a lifetime of employer contributions forgo an average of £91,500 in company pension scheme contributions.
Almost a third (29pc) said they expected to be entirely reliant on the basic state pension when they retired.
However, there are things the self-employed can do to avoid these pension pitfalls. These include using forgotten tax relief to start your pension, buying your business premises through your pension, carry forward unused annual allowances and employing your spouse to boost their pension savings.
Contact Nexus Wealth Planning today for advice and assistance on any of these issues.