Pension confidence drops amongst the self-employed

14 Dec 2020

Self-employed people’s confidence in retirement readiness has been negatively impacted by the pandemic, according to research from Nest Insight.

Despite the fact that 75% of people believe putting money aside for retirement is important, a rise from the 74% recorded in 2019, as much as 60% of self-employed people say their income has been negatively impacted by the pandemic.

In addition, 37% of the self-employed and 22% of employed people have reported a fall in confidence that they will be able to provide for retirement during the pandemic.

However, the poll revealed that 74% of the self-employed are able to save now, or over the next year, with 51% saying the amount they are saving hasn’t changed.

Moreover, according to a Pensions Age report, 20% of the self-employed have reduced their retirement savings, with 9% having started or increased the amount they are saving for their pension.

A total of 19% of self-employed people have reduced their emergency savings, whilst 15% have started or increased emergency savings during the coronavirus crisis.

Nest director of research and innovation, Jo Phillips commented: “Because our research programme is based on the principle of designing solutions that specifically fit the needs and context of self-employed people, it was vital to conduct this research to see if and how that’s changed as a result of the Covid-19 pandemic.

“Many self-employed people have seen their income negatively affected this year, but a large proportion continue to want to save, and feel able to do so, either now or in the future.

“Based on what we have learned from this research, we believe flexibility to variable and uncertain income, and predictability and control, are likely to be important features for solutions designed to support them to do so."

She went on to say: “We plan to continue with our trials in 2021, collaborating with other organisations to test tools and automated approaches that better meet self-employed people’s savings needs and preferences, to encourage and enable those who feel able to save.

“Whilst we recognise that not everyone is in a position to save now, by continuing with our research we hope that at times when the more vulnerable are able to save there will be mechanisms in place to support them.”