Pensions  

A manifesto for the self-employed

A manifesto for the self-employed

The Association of Independent Professionals and the Self-Employed has called on the new government to focus on five areas when reforming the way it deals with the self-employed.

According to IPSE the number of self-employed has grown exponentially in the past ten years and has reached almost 5m workers.

Collectively they make up 15 per cent of the workforce and contribute £305bn to the economy every year, according to the professional body.

In its manifesto launched on Saturday (November 9) IPSE came up with 40 policy recommendation the new government should consider following the general election on December 12.

Among these, it has listed five areas deserving of particular attention. These are:

  • Build a modern tax system: a full review of small business tax (including scrapping IR35 and ending the confusion over the Loan Charge) to unleash the UK’s entrepreneurial spirit;
  • End the culture of late payment: give the Small Business Commissioner more powers to clamp down on late payment – including ‘naming and shaming’ and even fining the worst offenders;
  • Identify solutions for saving in later life: work with industry to create products that are tailored to help the self-employed put money away for retirement;
  • Update freelancers’ parental rights: Extend Shared Parental Leave (SPL) to the self-employed and give them the same paternity/maternity pay rights as employees;
  • Incentivise workhubs to boost the high street: help revive Britain’s struggling high streets by incentivising the creation of workhubs in empty premises.

In its manifesto IPSE called on the government to sort out the pension system for the self employed.

The DWP had announced it would work on improving pension participation and retirement outcomes among self-employed people by testing a number of different approaches in its auto-enrolment review in December 2017.

A year later, the government launched a paper on self-employed retirement savings, where it announced that it was exploring invoicing and accounting systems to enable automatic pension contributions from the self-employed.

Data from the Department for Work and Pensions showed the number of self-employed workers saving into a pension through auto-enrolment had dropped from 19 per cent in 2012/13 to 16 per cent in 2016/17.

But IPSE stated auto-enrolment does not work for the self-employed – instead the government should roll out the sidecar pension scheme to this group, which splits savings between a pension pot and an emergency fund.

Nest started testing the sidecar model last November, with a trial rolled out to more than 5,600 employees of Timpson who will be monitored for two years to assess sign-up rates.

IPSE also called on the government to provide tailored guidance on saving for the self-employed via the Money and Pensions Service.

Simon McVicker, IPSE director of policy and external affairs, noted the December election will be a hugely important time for the country.

He said: “Therefore, it is vital that all political parties remember that, regardless of Brexit, there are 5m self-employed votes out there up for grabs.

“From building a modern tax system to ending the culture of late payment and boosting the number of co-working spaces, we believe all parties should be listening to the needs of the self-employed and outlining policies that will make a difference to them.

“The self-employed could prove decisive in dozens of marginal constituencies across the UK. All parties would do well to remember this and IPSE will be working hard during the campaign to get the message out there.”

maria.espadinha@ft.com

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