Pensions and Financial Inclusion Minister, Guy Opperman spoke recently at an Association of British Insurers (ABI) conference about the need for the UK pensions sector to solve the issues surrounding retirement funds for self-employed professionals.
At the two-day seminar ‘Savings Tech Sprint’, which was discussed how to make retirement easier for the self-employed, Opperman believes the UK Government needs the assistance of the pensions industry to formulate a “proper policy going forward”.
Andy Briggs, CEO, Aviva also spoke at the event and revealed that just one-in-five of the nation’s five million-plus self-employed professionals are saving into a pension plan. The nation’s self-employed population has grown by 50% since the turn of the Millennium and individuals need to be given the education and options to save adequately for their retirement.
“The serious reality is, we cannot do this on our own”, said Opperman. “Government cannot formulate policy without [the pension sector’s] help”.
Opperman revealed that, before his role in Government, he was a self-employed businessman and admitted to being the “worst possible saver”. It’s therefore important that the Government and the pensions industry can collaborate on a futureproof solution.
“This is a genuine opportunity and we need to dare to be bold,” added Opperman.
“There is a lot of interest and hope that you people are going to be the architects of change”, he told the delegates at the Savings Tech Sprint seminar.
Presently, auto-enrolment legislation only covers employers in the UK to place workers into a workplace pension scheme and make contributions towards it. The legislation does not include self-employed professionals.
The Government’s response to the Taylor Review did not go as far as extending auto-enrolment to the self-employed, which disappointed many that the retirement savings challenge was not being tackled head-on.
Former Pensions Minister, Steve Webb, said: “Pension membership among employed workers has soared because of auto-enrolment, but it remains shockingly low for the self-employed.
“It is very worrying that this issue has again been kicked ‘into the long grass’, meaning that millions of self-employed people face an insecure retirement.”