Self-employed failing to plan for retirement
In My Prime, a consultancy specialising in older workers, today warned that many self-employed people in the UK are failing to put enough money aside for their retirement.
Small business owners could once rely on using the asset value of their business to fund their retirement, but in the current economic climate this may be not be the case.
Dr Dianne Bown-Wilson, a small business advisor and age management specialist at In My Prime, said that the number of self-employed people with no pension provision is growing.
She also warned that the financial pressures being experienced by small business owners may also be jeopardising pension payments.
However, there are options available to those who may only be able to make occasional payments of varying amounts.
Stakeholder pensions are useful for people with an erratic income or low earnings as they accept contributions as low as £20 and payments can be made at irregular intervals without additional charges being made.
They are designed for people earning between £10,000 and £20,000 a year and the fee for managing them is capped, while for other personal pension products it can be much higher.
Under government rules, the fees on Stakeholder pensions must not exceed 1.5 per cent of the total size of the fund per year during the first ten years, and 1 per cent a year from year 11.
Further advice for the self-employed today came from ifaonline, which reported rumours that HM Revenue and Customs (HMRC) is planning to target the self-employed sector again this year in its efforts to improve tax collection rates.
In 2009/10 HMRC raised £255m by focusing on self-assessment tax returns, 7 per cent more than in 2008/9.
This year it is believed to be planning to target anyone who seems too entrepreneurial.