MPs call to bring self-employed under pension auto-enrolment

Freelancers and other people who work for themselves should get pension auto-enrolment to help them save for retirement, an influential panel of MPs has declared.

But it is currently "not clear that the government has a clear strategy or timetable for doing so," said the Treasury Select Committee after probing how to help hard-pressed households.

So the need for the government to explore using self-assessment and NICs to auto-enrol the self-employed into the system is "urgent", the committee said.

"The Treasury should keep an open mind towards doing so [adding the self-employed to the auto-enrolment system]," the MPs also wrote in their unanimously agreed report.

They added: "The possibility should be analysed as part of the next automatic enrolment review."

Policy wonks have previously recommended bringing the self-employed into auto-enrolment, under which a percentage of the worker's pay is automatically put into a pension on payday.

Although the self-employed not having an employer was then considered a practical barrier, the MPs heard the suggestion that a tax return could be used as the mechanism to put away up to 5% of a freelancer's earnings -- assuming the freelancer gives their permission.

Known to be critical of 'gig economy' platforms, the MPs warmed to the idea of bringing self-employed people under auto-enrolment having heard other evidence suggesting that excluding them from it has “exacerbated the incentives for employers to create pseudo-self-employment roles, without the degree of autonomy normally associated with self-employment, in order to benefit from lower taxes.”

Editor’s Note: Related –

Boost freelancer pensions with 30% bonus, says RSA

Self-employed ‘need a nudge on pensions’

Self-employed ‘far behind’ in retirement saving

Pension for freelancers 

 

13th August 2018

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