Are the self-employed saving enough for retirement?

Are the self-employed saving enough for retirement?

A report into pensions in the UK has concluded any adequate future pensions system must include a solution for self-employed professionals who are not saving elsewhere.

The Pensions Commission’s Interim Report said “structural barriers” mean many self-employed workers “are projected to reach later life without sufficient private pension savings”.

It highlights that only 17% of the 4.2 million self-employed workers in the UK currently save into a pension.

Last year think tank, The Social Market Foundation, urged the government to address what it called the ‘self-employed pension crisis’.

What is the Pensions Commission?

The Pensions Commission was set up in 2002 as an independent body to review the UK pension system and advise the government.

Its first commission published reports between 2004 and 2006, which led to the introduction of automatic enrolment and changed the way millions of employees save for retirement.

In July 2025, the government launched a second commission to examine the challenges facing the pension system up to 2050.

The move was welcomed by groups representing self-employed workers, including IPSE (the Self-Employed Association), which described it as "a landmark move" to tackle the growing retirement savings gap among the self-employed.

The commission released an interim report in May 2026, and its final report, including recommendations for the government, is due in spring 2027.

What does the interim report say?

The interim report outlined “existing and new challenges” to the UK’s pension system that need to be addressed.

Several of these directly relate to the self-employed community:

• No automation enrolment for self-employed workers

The report highlighted how there is no automatic enrolment for self-employed workers, meaning the pension system “does not provide for many who need it most”.

Although it reveals that many self-employed workers have built wealth for retirement by buying property or investing in their businesses, the report adds that many people are unlikely to be on course for an adequate pension income.

It specifically highlights younger workers and those in the gig economy, concluding that the self-employed “represent one of the most significant groups of concern for pension adequacy”.

• The urgent pension provision challenge facing those who rely solely on self-employment

• More solopreneurs – and lower income levels

• Self-employed people are working beyond retirement age

Compared with the Pensions Commission’s findings from 20 years ago, there are three times as many people working beyond state pension age, and self-employed people account for much of that increase.

Lower- earning self employed workers are far more likely to continue working than low earning employees, with the report indicating this is probably because “they feel they do not have sufficient resources to enjoy an adequate retirement”.

How can the government resolve the self-employed pension problem?

The interim report doesn’t go into detail regarding possible solutions to the problems it outlines. 

It does, however, state an answer must be found “for those self employed who are not saving elsewhere” and that it “must be one that works for younger, lower earning self employed people, who are especially likely not to have private pension savings”.

The Pensions Commission’s final report next year will investigate potential solutions, but answers may be found in previous work conducted by IPSE.

Their research has led to calls for six key recommendations to be implemented: 

• Support for the sidecar pension scheme - a hybrid model which links accessible, short-term emergency savings to long-term pensions. This would allow self-employed professionals to save for later life and put money aside for emergencies.

• Increased guidance from government outlining how the self-employed can save in later life.

• More user-friendly pension products, with clear policy wording and accessible language.

• Open access to a free mid-life MOT, connecting self-employed people with advisors to assess their financial health and savings plans.

• Improved financial education for younger people, co-ordinated between universities, schools and pension providers.

• Automatic enrolment should not be introduced for the self-employed due to the likelihood of many simply opting out of it.