There has been a new agreement by the Treasury Select Committee who agreed that the Treasury should “keep an open mind” when it comes to auto-enrolment pensions for the self-employed.
When it comes to helping those for are self-employed save for retirement, they added that it is “not clear that the Government has a clear strategy of timetable.”
The Association of Independent Professionals and the Self-Employed (IPSE) released a report earlier this summer insisted that the UK’s automatic enrolment system for workplace pensions was not suitable for people who work for themselves.
IPSE have found that 31% of self-employed people that they surveyed would stay on auto-enrolment on workplace pension scheme. One quarter of the people surveyed were prepared to quit the pension scheme in they got to keep more of their pay in the short term.
They also suggested ways they could give individuals the flexibility to set aside funds when they could by helping the self-employed with rainy-day funds by using ‘sidecar’ pension schemes. We have a range of tips on how to pay your own wage in order to save and prosper.
IPSE insists that sole traders need help with saving for the future and believe this should be a necessity of the Government and pensions sector. However, it appears the Treasury Select Committee have different ideas.
They believe that there is an “urgent” need for the Government to consider the use of self-assessment tax returns and National Insurance contributions in order to enrol self-employed people into the pensions system automatically.
The Government are also trying to encourage the self-employed to put up to 5% of their earnings into a workplace pension scheme and think tax returns could be used as a way to do this.
Finally the Committee said that the exclusion of independent professionals from auto-enrolment 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.”
If you need any assistance on your self-employment then please don’t hesitate to call us on 01908 760293.