Self-employed and freelancers failing to save for retirement

Around two in five self-employed (38%) and freelancers (40%) are actively saving for retirement, according to research from Aviva.

Just over a third (34%) of digital nomads, those who use technology to work remotely while travelling and living in various locations, rather than being in a single office, are actively saving into a pension or retirement plan. The picture is only slightly better for the self-employed (38%) and freelancers (40%). This means that most people working outside traditional employment structures are not building up dedicated retirement savings, potentially leaving themselves exposed to financial insecurity later in life.

The research, conducted among 500 self-employed and freelance workers in the UK, found that nearly a third (31%) of digital nomads intend to start saving soon, but a similar proportion (30%) admit they are doing nothing to prepare for retirement just now. Among all self-employed and freelancers, 23% and 18% respectively are planning to start saving soon. However, 32% of self-employed workers and 34% of freelancers are currently not taking any specific steps to prepare for their retirement.

Awareness of personal pension options is limited. Just 25% of digital nomads, 24% of self- employed and 22% of freelancers know about self-invested personal pensions (SIPPs) and stakeholder pensions.

Despite this, flexible working remains popular and just over four in five (81%) digital nomads plan to continue this working pattern long-term, with nearly half intending to do so indefinitely. Among the wider self-employed and freelance community, confidence in long-term financial security is mixed: just over half (55% self-employed) and 50% of freelancers feel confident and secure about their future.

Alistair McQueen, Head of Savings and Retirement at Aviva, said “This research highlights a clear gap in retirement planning for people who are self-employed and freelance. Without auto-enrolment or employer contributions to fall back on, many risk reaching later life without the savings they’ll need.

“The good news is that small, regular steps – like opening a personal pension and setting an affordable monthly contribution – can make a big difference. As we head into the new year, now is a great time to review your finances and plan how you’ll save for the future. Flexible ways of working call for flexible ways of saving and taking action today can help build the financial security you’ll need tomorrow.”