Review Calls for Pensions for Self-Employed Britons

The proportion of self-employed workers in the UK continues to grow. 

An independent, government-commissioned review of modern working practices by Matthew Taylor, chief executive of the UK’s Royal Society of Arts, has called on the British government to explore ways to improve pension provisions for the self-employed.

There are more self-employed people in the UK than ever before, and the proportion of self-employed people is growing as well, according to Taylor’s 116-page review titled “Good Work: The Taylor Review of Modern Working Practices.”

“It is time the government reconsidered how self-employment is treated and what it can do to support those who choose to be their own boss,” wrote Taylor.

Taylor said that the “government should focus on encouraging self-employed people to plan for the future, reducing the potential that the taxpayer has to pick up additional costs associated with ill health or inadequate retirement saving.”

According to the review, as the labor market adapts to the digital age, and as people seek ways to balance their personal lives with the need to earn money, it is likely the trend of increased self-employment will continue. “With this in mind, [the] government has to decide what level of support it wants to give to this growing proportion of the labor market,” Taylor wrote. “To do this effectively, we have to confront some of the ingrained perceptions of self-employment in the UK.”

These perceptions include the self-employed being seen as “a homogenous group of individuals” who ask nothing of the state, and take high levels of personal risk to grow a business in the hope of creating additional employment for others.

“This does not reflect the reality of self-employment in the UK,” wrote Taylor. “It would be wrong to treat all self-employed people the same. … the experiences and vulnerabilities of this group range from billionaire entrepreneurs to taxi drivers working 90 hours a week simply to pay their bills.”

Taylor said that because of the wide range of differences among the self-employed, policy interventions have to be tailored to respond to those who require support, while encouraging those doing well to “think about the future and plan for unforeseen circumstances.”

According to Taylor, who cited a 2015 report by the Resolution Foundation, self-employed people are less likely than non-self-employed people to save for their retirement. As few as 27% of self-employed people are putting money into a pension, down from 33% only a few years earlier. Meanwhile, more than 50% of non-self-employed workers are saving for retirement with a pension.

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