Trials to solve the savings crisis for the self-employed, which were supposed to start this year, will be delayed.
In a written response to Parliament, Guy Opperman, minister for pensions and financial inclusion, said the government would provide more information about the trial areas later this year, following its feasibility work in this area.
Mr Opperman admitted there was still no straightforward way to bring self-employed people into workplace pension saving, as far as the government was concerned.
He added: "Nor is there any consensus or evidence about the best approach to increasing pension saving among this group."
The Department for Work and Pensions (DWP) had announced it would work on improving pension participation and retirement outcomes among self-employed people by "testing a number of different approaches […] from 2018" in its auto-enrolment review in December.
This was after the government was accused of breaking one of its manifesto commitments – to include the self-employed in the auto-enrolment reforms.
Mr Opperman said: "We are committed to work towards implementing our manifesto commitment to improve retirement savings among the self-employed by testing targeted interventions to understand what works in practice."
According to a recent report from the Association of Independent Professionals and the Self-Employed (Ipse), only 31 per cent of the UK’s 4.8 million-strong self-employed population are paying into a pension.
However, Ipse did not advocate auto-enrolment as the chosen solution. Instead, it is supporting a sidecar scheme, which would allow the self-employed to save for later life and also into a separate ‘rainy day’ fund for emergencies.
According to Paul Stocks, financial services director at Dobson & Hodge, the self-employed tend to opt to keep cash in their business as opposed to investing it, as they can use those funds for new deals if they can access it quickly.
He said: "Many of my self-employed clients only begin to tackle pension funding once they are towards the end of their career – when they are perhaps winding down the business and they are over 55."
He added: "I’ve had people making ill informed decisions simply because they don’t trust the government or are fearful of future regulation change.
"This is unhealthy and yet constant change is always proposed, exacerbating the issue."
Mr Stocks agreed with Ipse that auto-enrolment was not a good solution for the self-employed.
He said: "It would no doubt introduce significant bureaucracy for those who are often fleet of foot and wanting freedom from the ties of employment."
maria.espadinha@ft.com
