Most self-employed lack retirement savings
A survey has revealed that the average British business owner is falling behind in the ability to save for retirement. Over seven in ten self-employed people state that they don’t have a pension, and of those who do, half don’t know how much it is.
Out of those who are creating a nest egg of some sort, nine in ten state that they contribute 10 percent or less of their take-home salary in regular instalments.
The survey showed that there is a reason why a small portion is being saved for retirement – 63 percent of the respondents stated that they were barely managing their everyday living expenses.
The same type of reasoning was found among the two-thirds who had no pension plan. They said that they just couldn’t afford one.
In addition, the government’s pension initiative of auto-enrolment may not be offered to self-employed people for at least a decade.
A person who commences a self-employed pension plan at the age of 25 will have about twice as much in pension savings at the age of 65 as a person who waits until the age of 35 and four times as much as a person who doesn’t start until the age of 45.