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Review calls for early access pensions for self-employed

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A Government-commissioned report into self-employment has rejected extending automatic enrolment in favour of pension products that allow early access to cover time out of work.

In December, Money Marketing reported on growing calls to bring self-employed workers – who make up around 15 per cent of the workforce – into the auto-enrolment regime.

But self-employment review chair Julie Deane says the suggestion “has not been well received by the self-employed”.

She says: “A far more workable and less bureaucratic solution would be the evolution and development of pension products created specifically for the self-employed.

“These would take into account the fluctuations of income and cater for periods when a withdrawal of capital might be necessary. Again it seems that the financial services industry needs to be made aware of the need for more flexible products for the self-employed – a large and expanding market.”

According to Government statistics, less than a third of self-employed people are saving into a pension. Deane says many feel they cannot lock away money because of the unpredictability of income.

She adds: “Accessibility to the pension fund to cover period of not earning would be highly desirable.”

The report also calls for clarification around the legal defintion of self-employment, equalising benefit allowances and including the self-employed in public policy impact assessments.

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Simon Fletcher

Auto-enrolment: pay attention or pay the price

By Simon Fletcher

As a chief executive officer of a business in the financial services sector, I have been dealing with the introduction of auto-enrolment for our clients for some time, but I can also speak from an employer’s point of view, having to go through the process ourselves.

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Comments

There are 3 comments at the moment, we would lover to hear your opinion too.

  1. It’s called a pension. It’s for when you retire.

  2. Take The High Road 15th February 2016 at 12:22 pm

    Hmmm…seems Ms Deane is a little out of step with current regulations. She should be aware that it is the government who increased the minimum pension a few years back from 50-55. If they(the government) want the industry to design new products, then they will first need to change their own regulations. When they decide what they finally want, the products can be changed..simples!

  3. So Flexible Drawdown combined with ISAs aren’t available to the self-employed? Did someone actually vote for this woman?

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