A new report has warned that self-employed workers in the UK may need to keep working until they are almost 80 to build up a big enough pension pot.
Research, conducted by Censuswide for financial app Multiply, has found that young freelancers (aged 25-40) are not saving enough for their retirement - despite the fact that they would like to retire at 64 and say they need an annual income of £35,628 to support them in later life.
There are 4.8 million self-employed workers in the UK, accounting for almost 15% of the workforce. However, almost half (47%) of those polled say they haven't even started saving into a pension. The average monthly gross contribution into a pension pot is £348 for those who do save and the average pension pot is just £43,582.
By comparison, almost all British employees that work full-time are now contributing to workplace pensions each month. According to the Department for Work and Pensions (DWP), the current rate of opt-ins for auto-enrolment pensions is 91%.
Another cause for concern is freelancers' relative lack of awareness of the potential shortfall. Half (50%) of self-employed people say they're not confident they're putting enough aside for later life, compared to 80% of the general population.
Eight in ten freelancers say that it's more difficult for them to plan for retirement than full-time employees. The majority (86%) say this is due to unpredictable income patterns, whilst 28% say it's harder to find suitable financial advice for self-employed people.
In addition, 68% say that the government isn't doing enough to help self-employed people plan for retirement; 44% of freelancers say they would be in favour of auto-enrolment for self-employed people but 39% say they either don't know what auto-enrolment is or feel it's a bad solution.
"Freelancer finances are a ticking time-bomb," said Vivek Madlani, co-founder and ceo of Multiply. "Huge numbers of people are now choosing to be their own boss and with so few of them making proper retirement provisions, it has the potential to cause serious problems down the line. It's clear that self-employed people need more support. The good news is, it's not too late for people to start saving and to put themselves in a much stronger position. I'd advise freelancers out there to look into ways technology can support them?-?and to do it as soon as possible."