Policies for increasing long-term saving of the self-employed
This report is sponsored by Old Mutual Wealth and looks at recent trends in self-employment to consider alternative policy options for increasing the long-term savings level of the self-employed, with the intention that the output feeds into the automatic enrolment review.
In recent years, there has been a significant increase in the number of individuals in the labour market classified as self-employed, particularly since the 2008 Global Financial Crisis. There is also evidence that the nature of self-employment is changing over time, with some jobs which historically have been undertaken by employees now becoming self-employed. However, this increase in self-employment has been accompanied by a decline in the proportion of this group who are contributing to pensions.
This report constructs a picture of the self-employed, their characteristics and savings levels based upon quantitative analysis of multiple datasets. Three different policy alternatives which could meet the various needs of the self-employed have been explored, along with the potential impact each could have:
- Defaulting in: an automatic enrolment style system for the self-employed;
- Maintaining workplace pensions: transition from workplace pensions to individual/personal pensions;
- Alternative products: engaging the self-employed with alternative products for long-term saving, such as Lifetime ISAs.
Chapter one analyses the evolving self-employed labour market to describe who they are, what they look like and what their attitudes are. By grouping them around key characteristics, a more detailed understanding of their situation and needs can be developed.
Chapter two looks at the saving of the self-employed, how and where they are saving for the future and for retirement.
Chapter three explores how policy alternatives could meet the different needs of various groups within the self-employed labour market. For each policy alternative, its impact is illustrated using case studies
To download the report, please click here.
To download the executive summary, please click here.
To download the technical report, please click here.
Keywords: self-employed, self-employment, Old Mutual Wealth, defaulting in, automatic enrolment review