More than a third of female entrepreneurs are saving nothing for their retirement, according to the latest Scottish Widows Women and Retirement report.
The number of female entrepreneurs in the UK has hit an all-time high of 1.7m, the report stated, but 600,000 of those are not currently saving for their retirement.
Of those that are saving the women in employment generally fare better.
The report found fewer than half of self-employed women are saving the minimum recommended level compared with 56 per cent of women that are employed by a company or organisation.
The report suggested the 46 per cent of self-employed women who are saving the minimum adequate level were among the best savers in the country, with an average savings rate of 16 per cent of income.
This compared with 14 per cent among self-employed men and was also higher than the average saved by both employed men and women at 12 per cent and 10 per cent, respectively.
Jackie Leiper, pensions director at Scottish Widows, said: “A growing number of women are taking charge of their careers by launching their own businesses or working as freelancers – 700,000 have set up on their own since 2005, and 1.7m women are now self‐employed.
“This raises real concerns when we consider that women are historically under‐prepared for retirement and that self‐employed women do not benefit from the safety net of auto‐enrolment, which has helped boost female employees’ savings since its introduction."
She added: “The good news is that when self‐employed women do save adequately, they actually put more of their income aside than anyone else – but the proportion of female entrepreneurs saving at all has not grown in the past decade.
"It’s clear that reform is needed to drive a step‐change in retirement preparations for the self‐employed, in the same way that auto‐enrolment has for employees in the workplace.”
Since 2007/08, the average savings rate for self‐employed women who do save has grown 5.2 per cent, according to the report, significantly exceeding the rate amongst women working for an employer which stands at 3.6 per cent.
One reason for the polarisation in savings can be put down to the wide variation of business earnings of female entrepreneurs, as 80 per cent of self-employed women who save inadequately earn less than £20,000 per year.
Anna Lane, founder and CEO of The Wisdom Council, a majority female‐owned business operating in financial services, said: “Ambition is a major theme that shines through from the women I work with and this is reflected in the increasing number of female entrepreneurs.
"There is a disconnect however with their aspirations and how it will be realised financially, with few having even considered anything other than personal savings to start their own business.”
She added that 30 per cent of businesses fail in the first two years and so this risk paired with the risk of not putting money aside for the future was a double‐edged sword often faced by female entrepreneurs.