Successful young entrepreneur? Don’t expect to retire before 79
Jamie Smith, adviser at Foster Denovo speaks to the Telegraph about how freelancers and business owners face a greater risk of being under-prepared for retirement.
Millions of young entrepreneurs face working for decades longer than they expected to reach their target retirement income, while the Government further delays its plans to boost self-employed pension savings.
Almost five million Britons now freelance or run their own businesses – nearly 15pc of the workforce and increasing among younger people. Less than a third of these pay into a pension, according to IPSE, a trade body for the self-employed.
The Government has pledged that 2019 will be the year it delivers on a promise delayed since 2017 to include the self-employed in a shake-up that has automatically enrolled 10 million people – 73pc of employed British workers – into a pension. This is a rise of 25pc since 2012.
While running your own business can be lucrative, research has showed it often leaves younger entrepreneurs woefully under-prepared for retirement.
In December the Department for Work and Pensions (DWP) announced it is carrying out more trials on ways to help those on irregular incomes save before implementing a policy first announced two years ago.
Jamie Smith, of financial adviser Foster Denovo, said; “This procrastination means these workers face a greater risk of under-funding their retirement and may have to work for years longer than their employed counterparts.”
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