Inflexible pension schemes hit freelancers’ retirement saving ambitions
46% of freelancers are ineligible for Lifetime ISAs because they are over the age cap of 40
Many freelancers are struggling to find ways to save for their retirement, according to a national survey from the Association of Independent Professionals and the Self Employed (IPSE).
Financial security was cited as the most important factor for the self employed when deciding when to retire (79%), with 37% of those intending to work past the state pension age doing so to be able to financially support themselves.
Property was revealed to be the only method of saving that freelancers feel confident will support them in retirement (56%), with 40% of those surveyed not confident in using their savings (excluding ISA). 9% of those whose age qualifies for the state pension did not believe they would be eligible for it, while 11% did not know whether they would be eligible or not.
In a previous study from IPSE, 16% of freelancers admitted that do not save for retirement at all, with 63% opting for a pension fund and 33% investing in property.
Meanwhile, 46% of respondents stated that they are ineligible for Lifetime ISAs due to their age, while 24% did not know if they would use one. Of those that did not intend to use or were unsure whether they would use one, 63% said this was because they did not know enough about it.
Chris Bryce, IPSE chief executive, commented: “Too many independent professionals are having to work later in life to keep themselves financially stable. And worryingly, many are not confident in finding ways to save for their retirement at all.
“IPSE urges Government to call on NEST to create a flexible pension solution for the self-employed, allowing them to withdraw the last two years of contributions without a penalty.
“This would not require any additional contribution from government. The scheme would be solely funded by the payments made by the self-employed person.”