Over two in five (41%) self-employed people do not pay into a personal pension, CMC Invest has revealed.

New data from the investment services provider showed that of 5,078 UK adults, 7% identified as self-employed.

While employers must offer their employees access to a workplace pension scheme by law, there are no similar requirements for self-employed people. This means it is up to the person who is self-employed to save for their retirement.

CMC Invest stated that this is why self-employed workers who neglect to set up a pension plan can easily find themselves financially vulnerable in later life, although they are still likely to be eligible for a state pension, assuming they’ve built up enough qualifying years of national insurance contributions.

The firm added that for these people, the solution to this problem may be a self-invested personal pension (SIPP). This is a self-managed pension that allows savers to choose their own investments and enjoy tax-free benefits.

However, the survey found that 44% of self-employed people were not aware of SIPPs, while of the survey’s 282 homemakers and full-time parents, the lack of awareness was even greater, with 73% of this group saying they didn’t know about SIPPs.

Furthermore, of those who had a pension (71%), two in five (40%) admitted that they hadn’t consolidated their pension pots into one account, meaning that it can be difficult to track how much has been put aside for later life.

This comes as the Association of British Insurers revealed that approximately 1.6 billion savers have "lost" pension pots, worth £19.4bn in total.

Head of CMC Invest, David Dyke, said: "The statistics, while not surprising, are concerning. A pension is there to provide you with an income in the future. Without a pension, as people approach the age they’d like to ease up on work, they’re likely to be left short.

"With a SIPP it’s easy to start, stop and change pension contributions at any time, making it fit with the often-irregular income pattern of self-employed people.

"CMC Invest designed its newly launched SIPP with a flat, simple fee structure, meaning customers will always know what they’re paying. When you open a SIPP with us, you can easily transfer any existing pensions into the account, letting you consolidate all your pensions into one."

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