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Supporting Self Employed People To Save For Retirement

Evidence type: Insight i


The Office for National Statistics estimates that there are almost five million people in some form of self-employment in the UK, representing a significant proportion of a working population of 32 million. Interventions to encourage retirement savings have typically focussed on those in formal employment, rather than the self-employed. While about half of all self-employed people say they have some sort of retirement saving, only 15% are actively contributing to a pension, compared to 73% of employed workers, and 87% of those who are eligible for auto-enrolment.

The Department for Work and Pensions (DWP) commissioned a review in 2017 looking at the impact of auto-enrolment, with one of the evident conclusions being this clearly wasn’t suitable for self-employed people as there was no employer to enrol them. The review recognised that one solution would not suit everyone, and that bespoke and more tailored solutions would be necessary to help this diverse group.

DWP and NEST insight are developing a programme of behavioural interventions to test on self-employed people, with the aim of encouraging them to increase their long-term and retirement saving.

The study:

This 2019 report from NEST Insight provides a summary of the first stage of NEST’s programme of research into the savings behaviours and attitudes of self-employed people.

The research contained three core elements:

  1. A review of published evidence on ‘what works’ in promoting voluntary commencement of pension and long-term saving.
  2. A qualitative exploration and the ensuing development of a set of messaging concepts designed to encourage pensions savings and ideas for mechanisms that would enable people to start saving, or to save more. This involved:
    • Four two-hour focus group discussions in London and Manchester with 12 ‘message’ examples and nine interventions being considered.
    • Ten 30-minute telephone interviews with selected participants from phase one, to refine the selected ‘messages’.
  3. Quantitative research to help understand the behaviours and of self-employed people and their interactions with different online platforms that aimed to facilitate retirement saving. An online survey was administered to 2,013 self-employed people in May and June 2019. Data was weighted to be representative of the self-employed population. This ran alongside a face-to-face representative survey administered by Ipsos-MORI, to compare the two sets of results for any online ‘skew’.

Key findings:

  • Over half (55%) of the self-employed population states that they would welcome more guidance on the best ways to save for retirement.
  • Self-employed people can regard retirement and pensions in a different way to employed people, tending to save for the ‘long-term’ rather than a specific life-stage.
  • Options and messages for investing need to use language that represents the wider range of savings vehicles that self employed people tend to use
  • Variation in income levels can create problems for self-employed people when saving for retirement. Flexibility and control is therefore of paramount importance, with many preferring to have some liquidity in savings rather than retirement products.
  • This research suggests that less than a quarter of self-employed people (24%) are currently saving into a pension, though this is in fact higher than other figures suggested (15% according to the ONS). In contrast, 37% save into a cash ISA, while half save into an instant-access savings account.
  • A third of self-employed people (34%) say they already have a private or workplace pension but are not currently saving into it.
  • The top five sources used by self-employed people for guidance related to financial decisions are:
    • Family/friends (52%)
    • HMRC/gov.uk (50%)
    • Peers (32%)
    • An accountant (29%)
    • Bank (20%).
  • The qualitative research showed that bespoke and personalised advice was more likely to be effective. However, there were some key principles that applied across the self-employed population, including:
    • Focusing on the here and now;
    • Emphasising self-control;
    • Giving the facts.
  • Well over half (56%) liked the idea of automatically diverting a proportion of their income towards saving for retirement.

Next steps

  • The four main messages that were decided upon to test for engagement and propensity to save were:
    • Palatable contributions (daily amounts saved seemed to mean more than a monthly amount);
    • Pensions flexibility;
    • Tax benefits and relief;
    • Loss avoidance (‘not missing out on pension returns’).

Points to consider:

Methodological strengths and limitations:

  • The report utilises mainly descriptive statistics from survey data that the authors say is representative, so we have a fair degree of confidence in the findings. However, due to the discrepancies between some of the figures presented in this research compared to other work, caution is still needed when interpreting the results.


  • This report is of clear interest to policy- and decision-makers looking to influence the agenda around pension contributions among the self-employed population.

Generalisability/ transferability:

  • The results of this research can be seen as a reasonably robust snapshot of drivers and patterns concerning the savings habits of the self-employed population in the UK.

Key info

Year of publication
Contact information

Matthew Blakstad, Greg Bowe, Jo Phillips, Madeline Quinlan, Will Sandbrook, Gareth TurnerNEST Insight