On the go: The Association of Independent Professionals and the Self-Employed has called on the new government to update the long-term savings environment to better provide for entrepreneurs.
According to IPSE, the number of self-employed has grown exponentially in the past 10 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, IPSE came up with 40 policy recommendations that the new government should consider following the general election on December 12, including the call to sort out the pension system for the self-employed.
The Department for Work and Pensions 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 DWP show the number of self-employed workers saving into a pension through auto-enrolment had dropped to 16 per cent in 2016-17 from 19 per cent in 2012-13.
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 that 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 savings 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: “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.”
