The world of contracting in Britain is booming, and rightfully so, but not all contractors are very good at looking into the future it seems.
A new survey shows us quite clearly that around 3 quarters of self employed contractors in the UK have absolutely no pension at all. Pure madness if you ask me.
Not only that, but the survey also went on to find out that of those contractors that DO have a pension, over 50% of them have absolutely no idea how much is there.
If that isn’t bad enough, it was also discovered that 91% of contractors who pay into a pension only do so with 10% or less of their income. This could mean there won’t be enough cash to fund a retirement.
It’s no wonder that experts are predicting that many contractors are going to be forced to work well into their seventies, and even eighties. They just won’t have the funds available to put their feet up and enjoy a retirement. They will have to keep on working, probably full-time.
Why are freelance contractors so uninformed, and let’s face it, ignorant about the subject of pensions? The director of the company behind the survey thinks he knows the answer, and it is all to do with the gig economy.
“This year’s results highlight the pressures that are being exerted by the ongoing Uberisation we’re seeing in the UK’s employment market,” he said.
Maybe he is right or maybe he isn’t…but one thing I do know is that if you are self employed then you must make sorting out your pension a number one priority. If you don’t plan, then you plan to fail. Remember that.
Some of the pension options currently available to contractors and freelancers include a personal pension, a SIPP (self invested personal pension), a NEST (national employment savings trust), and a stakeholder pension.
Which is the best option for you? There is no definite answer as it depends completely on your own individual circumstances, and this is why I recommend you do some research.
For example, you could find out more about each type of self employed pension plan by searching the internet, and then once you are more informed, speak with an expert to delve deeper into the ins and outs of each option.
What I do know for sure is that relying on the state pension is a very bad idea. If you are planning on the government taking care of you in retirement then you might want to think again.
Instead, take matters into your own hands and get that private pension for contractors sorted out immediately.