Govt reviews how to auto-enrol self-employed

Harrington-Richard 620

The Government will examine how to bring in the self-employed into pension saving as part of its review into the success of auto-enrolment next year.

The terms of the review will be set out in the coming weeks.

In an interview with the Financial Times, pensions minister Richard Harrington says finding a way to auto-enrol the self-employed “should be the kind of thing we are talking about in a review.”

He says: “The self-employed are not all people with accountants and IFAs. Many self-employed people could now be earning the minimum wage, maybe a bit more, but it is complicated.

“In the end we have to look at them being included in an envelope like the auto-enrolment system – and the same with people who have multiple jobs.”

One suggestion by the industry is for self-employed individuals to pay extra national insurance contributions which can then be paid into a private pension.

Harrington says its is “common sense” for contributions for employees to go beyond the 8 per cent minimum they will reach in 2019.

But he says the decision on when to increase contribution rates may have to wait.

He says: “Instinctively it seems right to bed it in and make sure it is firing well on 5 and 8 per cent before making any decisions.

“But that does not mean it [contribution rates] cannot be discussed.”