This research, conducted by the Pensions Policy Institute (PPI) for Zurich, used a UK-wide YouGov study of more than 600 individuals currently working in the gig economy.
PPI found that a typical worker now aged 25 earning £25,000 could end up with a £75,600 lump sum at retirement.
This is based on the review of working practices in the modern economy, conducted by former Labour adviser Matthew Taylor, which recommended enabling individuals to put aside 4 per cent of their income when completing tax returns.
When combined with the state pension, this would equate to an income at retirement of £13,500.
The UK gig economy includes 5m people, ranging from those who class themselves as self-employed through to those on zero-hour or agency contracts, Zurich said.
The government is currently reviewing auto-enrolment, with a report expected to be published before the end of the year.
Pension minister Guy Opperman has recently confessed that “there is no simple solution” for including self-employed people in auto-enrolment.
According to Zurich's analysis, worker auto-enrolled into a workplace pension would be even better off at retirement if the current restrictions in place on minimum earnings were removed, where they could then end up with a final lump sum of £101,500.
When added to the state pension, this pot could give them an income per year of almost £15,000 at retirement.
In its the government's own review, Mr Taylor concluded that effectively auto-enrolling self-employed people into a pension through the self-assessment tax process would help to deal with the issue of this type of worker failing to set cash aside for retirement.
According to Chris Atkinson, head of consumer distribution at Zurich UK, “using tax returns to extend auto-enrolment to the gig economy would be a step in the right direction, but it’s no silver bullet”.
"On its own, is still unlikely to give individuals a big enough pot in retirement,” he added.
Mr Atkinson said: “The reality is that many gig workers may have to work far longer than even traditional employees before they can retire.
“This will be at a time when they are more vulnerable to financial shocks from ill health – or may find it harder to get a job in the first place.
“As well as saving more of their income earlier in life, it’s vital gig workers ensure they have a financial cushion in place should the unexpected happen.”
The research also showed that just 2 per cent of the gig economy workers have access to each of life insurance, income protection and critical illness insurance via their gig employer.
This would leave them, or their dependents, without financial back-up should they become unable to work through illness or injury, Zurich said.
To reduce the risk of a gig economy long-term savings and protection crisis, the provider makes five key recommendations, with the first one being the expansion of auto-enrolment through the self-assessment tax return process.
Zurich is also suggesting that the government should commission a review of employment and working practices for older gig workers, and introduce financial incentives for gig companies to offer income protection.
The company advocates for more financial education from gig companies to increase awareness among workers of existing savings and protection products.
Finally, it is suggesting that greater innovation from the insurance industry is needed, to develop more flexible savings and protection products for workers unable to commit to paying a regular subscription.
According to Michelle Cracknell, chief executive of The Pensions Advisory Service (TPAS), the proportion of gig economy workers that contact the guidance body is small, “probably due to the lack of signposting”.
She said: “This is a worry as these people do not have the support of a workplace and do not have the luxury of a pension scheme being set up for them.
“Those that do contact us fall into the profiles of ‘45-year-old who counts herself as self-employed’ and ‘58-year old approaching retirement’, and have previously been in an employed position, so are used to the concept of part of their earning going towards saving for their retirement.”
Ms Cracknell argued that “gig economy workers have the pressures of ensuring that their immediate financial requirements are met”.
However, “the need for everyone to take responsibility for their retirement income is the same,” she concluded.
maria.espadinha@ft.com
