Auto enrolment has proven to be very effective at helping traditional workers to start saving for retirement. But for the self-employed, the current auto enrolment framework isn’t suitable, as there is no employer to enrol them into a scheme. Nest Insight is working with the Department for Work and Pensions on a programme of research and trialling that draws on the insights and learning from automatic enrolment to explore and test different approaches to see what might work to enable increased long-term savings among self-employed people.
This first report, Supporting self-employed people to save for retirement, presents findings on:
• the attitudes and behaviours of self-employed people around retirement saving
• potential ways of communicating with them about planning and saving for later life
• practical ways of enabling them to do so more easily.
The next stage of the research programme has already begun, with field-based trials underway to test the ideas developed in the exploratory stage. Nest Insight is also preparing two or more technology-based trials in partnership with providers of platforms used by self-employed people to manage their money, with initial findings due to be released next year.
Jo Phillips, Nest Insight head of research and innovation, comments: “Although most self-employed people say they want to save for retirement, many struggle to do so in practice. Encouragingly most are open to help, guidance and encouragement to get on track with saving for later life.”
“We know that self-employed people are a highly diverse population and it will be tricky to find a one-size-fits-all approach. By asking self-employed workers what they want, we've taken a significant step forward to discovering what those solutions might look like.”
“We know that control and adaptability to changing circumstances are really important for self-employed people, as is some element of access to their money in case of need’, often due to the varied pattern of their income. We’re currently exploring opportunities to build in simple and easy ways to save within the personal finance and accounting platforms they already use, and looking at how to communicate more effectively with self-employed people via the channels they’re turning to most frequently for financial guidance and advice.”
“We’re excited to have moved into the second phase of our research, using this information to help us test real, practical solutions tailored to the needs of self-employed people,”
Guy Opperman, Minister for Pensions and Financial Inclusion, said: “We want to boost the future prospects of millions of hard-working self-employed people, including younger and lower-paid workers, and that’s why we’re trialling various approaches which could help them plan ahead financially for later life.
“Nest Insight’s extremely helpful report has informed the work in progress and I look forward to seeing the positive interventions that follow.”
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