Rob Lewis, 42, says he most likely will never be able to afford to fully retire.
The art director, who manages creative projects, told The i Paper retirement didn’t feel like a realistic option as someone who was newly self-employed and didn’t have significant savings.
Rob isn’t alone, with research from Get Britain Pension Ready finding nearly one million self-employed UK adults don’t believe retirement is a possibility for them.
He said: “I had to move into freelancing at very short notice when my previous employer had to make urgent cuts. That timing was challenging as I had just purchased my first property, so most of my savings had gone into the deposit and associated costs.”
Starting his own business meant his immediate focus was on covering monthly bills and reinvesting back into the business.
He added: “At the moment, contributing to a pension isn’t something I’m able to prioritise financially, although it’s something I plan to address once things become more stable.”
Rob said his most recent pension has roughly £14,000 in it and overall has pension savings of just under £25,000.
He described retirement planning as feeling “distant” and his main concern was making sure he was earning enough to cover living costs month to month.
“The reality is that with current pension structures and the rising cost of living, it’s difficult to build enough in a pension to retire comfortably.
“I was only able to buy my first home in my early forties, which means my mortgage currently runs until around the age of 75. Realistically, that makes the idea of a traditional retirement quite difficult.”
‘I started saving too late’
Drew Emery, 52, also feels as though he won’t be to retire until he is at least 70, after feeling he started to contribute to his pension too late.
The freelance writer from Leeds, said he wasn’t confident about having enough money for later life after only starting to save into a pension at the age of 30.
Drew Emery currently has £180,000 saved for retirement but wishes it was more (Photo: Richard Walker/PA)He said: “While I have a pension, it’s not one that would be sufficient to maintain my standard of living or to fulfil the dreams I have for my retirement.
“The cost of living is rising, and my wife and I have two young children to think about, so we save what we can for retirement but there are immediate expenses to balance too.”
Drew currently has £180,000 saved across two self-invested personal pensions (Sipps) but says when he was in his mid-30s he realised he wasn’t saving enough.
He puts in £100 into his pension each month but if he gets commissioned for a big project he tries to stick a larger chunk into it.
“I’m hoping to be mortgage free by retirement and we want to live by the sea somewhere. Some friends and I have always talked about going on overseas cricket tours when we retire – including the Ashes in Australia,” Drew said.
Many self-employed like Drew have dreams for their retirement but Get Pension Ready campaign found 45 per cent don’t agree they have an appropriate sum of money in their pension funds to maintain their current lifestyle and pay their bills at the end of their working life.
Drew said: “We’re just moving at the moment to a much more manageable mortgage that will free up a considerable amount of money every month, some of which I can divert into a pension.”
He also admitted he wasn’t contributing into a pension for 7 years after cashing in a workplace pension worth £1,200 when he was 23 and not enrolling into another until he was 30.
“I was made redundant and I had £8,000 worth of student loan debt with no idea what to do next and so I thought that money would see me through a summer.”
If someone leaves their workplace or occupational scheme, they could ask for a refund of their contributions but there are set dates you must do that by.
Currently you can ask for a refund in 30 days if you are in a defined contribution workplace scheme and two years if you are in a defined benefit workplace scheme.
Aside from this the earliest a person can access their pension in the UK is 57.
“I next got a workplace pension when I was about 30. I turned that into a SIPP when I was about 40.
“I felt it was something I could catch up on later in my career, but I realised in my mid-to-late 30s that I wasn’t saving enough,” Drew said.
At that point he recounts realising how much compound interest he could have been earning if he had been paying into his pension consistently all along.
He added: “It’s the benefit of hindsight, I suppose, realising how important it is to start saving for retirement when you’re young, even if only in small amounts, because every little bit counts later on.”
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Sarah Lloyd, chief executive of comparison site Annuity Ready, said self-employed workers not only miss out on employer contributions but they navigate retirement planning with less information and support.
She said: “This is a growing group of British workers that make up nearly 15 per cent of our workforce, it’s important we’re giving them the information and support they need to plan for retirement.
“Your type of employment should not be a barrier to that.”
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