A new study has found that a majority of self-employed individuals in the UK have not made sufficient savings towards their pension for their time in life. The study, conducted by Hargreaves Lansdown alongside Oxford Economics, found that just 22.3 per cent of freelancers have saved enough towards their pension, according to the time of life they have reached.
The findings were part of the most recent edition of Hargreaves Lansdown’s HL Savings and Resilience Barometer, which assesses various factors to gauge the financial resilience of the UK every six months. The barometer takes into account key measures of financial resilience, including being in control of debts, protecting your family, saving in case of “a rainy day”, later life planning and investing in order to make more of your money.
Overall, the most recent barometer showed that financial resilience increased to 57.7 out of 100 during 2021, although Hargreaves Lansdown points out that the UK’s financial resilience is “strikingly uneven”. Spurred on by increases in spending, inflation and interest rates, Hargreaves Lansdown forecasts that financial resilience will decline to 56.2 per cent by the end of 2022.
The barometer showed widespread pension-related struggles, with less than 40 per cent of working age households in the UK currently set to receive a pension income of £26,000, which is the UK’s current average. As well as freelancers, high income families were also shown to not be saving enough for their pensions., while around half of families do not have sufficient life cover to support their families.
Significantly, the barometer also showed that around a third of people within the UK do not have sufficient savings to cover at least three months of essential purchases. Again, the self-employed were found to be particularly vulnerable to this problem.
Author: Steven English