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Pension Tips

Are self-employed women saving enough?


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Profile Pensions

Growing numbers of women are doing it for themselves and becoming self-employed, but often aren’t putting away enough for the future.

A massive 1.7m women in the UK are currently self-employed, according to latest data from the Office for National Statistics. Analysis from Fidelity International’s report ’Generation Self-Employed’ found that the vast majority (96%) have chosen this route so that they feel more in control of their working lives.

However, when it comes to planning for retirement, self-employed women are falling way behind their employed counterparts. Fidelity’s research reveals that more than two-thirds (71%) of self-employed women don’t have any form of pension. In contrast, less than half this number (35%) of employed women say they don’t have a pension.

Emma-Lou Montgomery, associate director for Personal Investing at Fidelity International, said: “More than 10 million people now benefit from being automatically-enrolled into a workplace pension. However, choosing to become your own boss means assuming the responsibility of planning for retirement yourself. And while the number of female entrepreneurs is on the rise, our figures suggest many have yet to consider what this means for their finances.”

Why aren’t self-employed women saving for the future?

Almost three-quarters (73%) of self-employed women who aren’t saving for the future say they simply cannot afford to, Fidelity’s research found, whilst one in 10 (11%) said they don’t know how to go about it.

If you work for yourself, you won’t have access to a company pension scheme, but you can still contribute to a personal pension. Personal pensions are defined contribution, or money purchase, pension schemes, where your money is invested. The amount you end up with at retirement depends on how much you’ve contributed and how your investments perform. You can find out more about the pension options available to you in our blog ’Pensions for the self-employed’

You don’t need a big lump sum to get started. There are plenty of pensions which allow you to pay in just a small amount each month if that’s all you can afford. If you are struggling to put any money aside for retirement, look at any ways you might be able to reduce your outgoings so you can channel a bit more into your pension. For example, do you have a subscription for a magazine you never read, or are you paying to be a member of a gym you rarely go to?

Use our pension calculator to set your retirement target

Whether you’re self-employed or working for a company, setting yourself a target of the sort of income you’d like to live on when you retire can help focus your mind on retirement and how much you should be putting away.

Our pension calculator can help you work out how much you’ll need in retirement. All you need to do to get started is answer a few simple questions, such as whether you’re in a relationship or single, whether you own your own home or rent, and the age you wish to retire at. The calculator will then give ou an idea of how much income you’ll need in retirement for both a modest and more comfortable retirement. It will then show you how you might be able to reach this level of income with the State Pension and a personal pension.

The calculator also has a handy sliding scale so that you can see how much the amount you need to save reduces or grows if you decide to retire earlier or later.

So don’t delay – the sooner you know how much you’ll need, the sooner you can start saving towards your goal.