Thirty-one per cent of the self-employed plan to rely entirely on the state pension in retirement, research by Prudential has found.

The company has warned that self-employed workers are “heading towards a pension saving crisis as they cannot afford to save for their retirement”. Its survey found that more than two fifths (43 per cent) of those working for themselves admit they do not have a pension, compared to just 4 per cent of those in employment. Thirty-six per cent of the self-employed say they cannot afford to save for retirement.

Self-employed workers now make up 15.1 per cent of the UK workforce with more than 4.8 million people working for themselves but Prudential’s research found they are heading for a less comfortable retirement with many not planning to stop work.

Furthermore, the survey found that although the self-employed are savers, they are more focused on day-to-day emergencies than the long-term of retirement. Two thirds (64 per cent) of the self-employed save to build up a safety net in case of an emergency in comparison with 57 per cent of those in employment.

Just one in 10 self-employed people see a financial adviser regularly, despite having potentially more complex requirements than someone in employment. One in five (19 per cent) are not confident with money and financial matters, while a quarter (24 per cent) worry that they do not know enough about money; 20 per cent admit they do not take pension saving seriously as they do not think it applies to them.

Commenting, Prudential retirement income expert Kirsty Anderson said: “Saving for retirement is tougher when you are self-employed as there is no one to organise a pension for you and no employer making contributions on your behalf.

“On top of that self-employed workers often don’t have a regular income so many will focus on setting aside money as a safety net if they cannot work. Saving for a pension is still important as no one wants to work forever and no matter what your employment status, having money to fund your retirement is essential as the state pension is unlikely to be enough to fund a comfortable retirement.”

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