Later Life

DWP and pensions industry begin self-employed pension trials

The trials will focus on marketing interventions and behavioural prompts through invoicing services and the banking sector to engage self-employed people.

Rozi Jones
|
18th December 2018
Houses house of parliament commons government govt gov
"The lack of pension saving by the self-employed has reached epidemic proportions, with only a tiny fraction of self-employed people actively saving in a pension."

The Department for Work and Pensions - alongside NEST Insight, Aegon, Smart Pension and the Association of Independent Professionals and the Self-Employed - have begun trialling new savings initiatives designed to help the self-employed save for later life.

Aviva, Barclays and Lloyds will also contribute to the programme of research and trialling activity, which will focus on testing tech tools aimed at prompting self-employed individuals to save.

The trials will also test how and where to deliver the propositions, and will focus on marketing interventions and behavioural prompts through invoicing services and the banking sector to engage self-employed people.

However some in the industry, including former pensions minister and director of policy at Royal London, Steve Webb, branded the lack of progress "profoundly disappointing" and instead called for automatic enrolment for the self-employed.

Jonathan Lima-Matthews, IPSE’s senior policy adviser, said: “With IPSE research showing just 31% of the self-employed are saving into a pension, there is an urgent need to avert what is a looming crisis. As concerning as the situation is though, it also presents a fantastic opportunity to enact positive change on behalf of millions of self-employed people across the UK.

“And that’s why we are delighted to be working with the Department for Work and Pensions, our research partner NEST Insight, and savings partners Aegon and Smart Pension, to test tailored and progressive savings provisions which will give long-term peace of mind to the burgeoning self-employed workforce.

“In partnering with both Government and industry, IPSE is inspiring innovation, and making good on our commitment to help overcome the self-employed pensions crisis. We strongly encourage others within the pensions industry to follow suit and help three million self-employed people save for a secure future.”

Steve Webb, director of policy at Royal London, added: "The lack of pension saving by the self-employed has reached epidemic proportions, with only a tiny fraction of self-employed people actively saving in a pension.

"But despite a 2017 manifesto commitment to include the self-employed in automatic enrolment, we now know that all we will have by 2019 is more research and pilots, mainly focused on testing different forms of marketing message.

"The lesson of automatic enrolment is that by far the most effective method to nudge the self-employed into pension saving would be via an opt-out system administered through the tax return process which could reach up to two million self-employed people a year.

"But HMRC clearly doesn’t have capacity to take on this agenda. The lack of progress on this issue is profoundly disappointing, especially with millions of people spending periods of their working life in self-employment".

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