“Bold” pension reform is needed for the self-employed market, the Tax Incentivised Savings Association said, as it unveiled the first in a series of proposed pension policies which have been developed by the Savings and Investments Policy project.
In response to HM Treasury’s three-month pension consultation process on taxing pensions, the project will publish a series of policies over the coming weeks aimed at rebuilding consumer confidence and trust in short, medium and long-term savings.
One proposed policy area covered is pensions for self-employed individuals.
The National Employment Savings Trust previously told FTAdviser that financial advisers have a major role to play in getting the self-employed market saving for a pension, with recent statistics showing just a third of self-employed people are currently saving into a pension.
The self-employed market clearly fall outside auto-enrolment and therefore two thirds are simply not saving for a pension.
At present, Nest has more than two million members altogether, although only a little more than a thousand are self-employed individuals.
Adrian Boulding, policy strategy director of Tisa, said: “An area which presents the opportunity for bold reform is pensions for the self-employed. We must end the rough deal the self-employed face over saving for their retirement.
“The first year of this Parliament presents an opportunity to be bold, engage in debate and ensure the pensions system works for both present and future generations.”
Other proposed policy areas covered include defined contribution pension tax reform, getting the nation to 8 per cent and beyond pension contributions, forecast incomes at retirement and comparisons between ‘exempt-exempt taxed’ and ‘taxed exempt-exempt’.
“Our proposals address how to tackle the on-going savings crisis and raise retirement savings levels for all people, which will in turn increase the amount of money available to invest in UK Plc, thereby supporting wider economic growth.”
Furthermore, Tisa’s Savings and Investments Policy project worked with the Wisdom Council to test the proposed policies with savers and investors.
It found 41 per cent believe they know the size of the pension pot they will need, 18 per cent believe they have planned sufficiently to achieve this, 53 per cent do not know how much should be contributed each month to reach their goal and 38 per cent want young people to have access for a house deposit but 66 per cent want access limited until 55 and over.
It also found that matched contributions are key - the more employers and the government contribute, the more motivated employees are to contribute to their pensions.
donia.o’loughlin@ft.com
