This article aims to explore the reasons why the self-employed can find themselves in poorly provisioned pensions by the time they either decide voluntarily to retire, or are unfortunately, forced to stop working. I hope that, if we in the adviser community can communicate our knowledge and understanding of the working lifestyles of the self-employed, then we might just help them to plan to avoid finding themselves in this situation.

In the UK, there are currently millions of self-employed people. Based on a survey undertaken by Scottish Widows and published in their Issue 1, 2020 edition of techtalk, only a small number are currently saving anything towards their retirement through a pension, although many have some retirement savings accumulated through previous employment.

Their survey uncovered that there were five main reasons:

  • perhaps surprisingly, a good proportion of self-employed people do not believe in the idea of retirement. Rather, they are so 'into what they do', they do not consider that they should cease doing it. To them, the idea that there is an arbitrary age at which they cease doing what they enjoy is a nonsense. They often don`t take into account that ill health may be the cause of this.
  • they place a high value and attach much importance to the idea of flexibility. This extends to making provision when they can afford to and not doing so when they cannot. They also need to access their provision and to be able to do so quickly should the need arise.
  • generally speaking, their knowledge and understanding of products in the retirement provision space is limited and their motivation to engage with the advice process is likewise limited.
  • when they do engage with the idea of making financial provision for their senior years, they tend to in the form of `buy-to-let` properties. They are inclined to do this because they trust their knowledge of the local market in the form of property values and rental incomes achievable.
  • with some self-employed it comes down to simple affordability.

It is also worth noting that, as part of the solution, careful consideration should go into the product selected. Perhaps the appropriate product hasn`t yet been `invented`, given how products are generally speaking, currently driven very much by legislation and taxation treatment.

By communicating the above knowledge and understanding in our marketing strategies, perhaps as advisers, we can help the self-employed plan to avoid finding themselves poorly provisioned in their later years.


Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of financial advice. We recommend that you take financial advice before making any financial decisions.