Are you self-employed? Do you have a pension?

Are you newly self-employed or an old hand?  Do you have a pension? If the answer is no, then you are not alone, but are possibly one of the millions of people contributing to what has generally become known as the “pensions crisis”.

The TUC recently said that the self-employed accounted for more than 40% of the net rise in unemployment since mid-2010. They also said “odd jobbers”, pensioners and part-time workers were the fastest growing groups.  In other words individuals who might not regard self-employment as their best or first option and those that could be considered financially vulnerable. Indeed this paints a portrait of workers compelled to go the self-employed route which is at odds with findings from a new report published by the Resolution Foundation. It claims the growing numbers of self-employed are going that route as a positive choice, with a third describing themselves as “entrepreneurs”.

Polling for the Resolution Foundation report also showed that only 34% were paying into a pension although the figure was slightly higher for those in their 50s and 60s. As the economy appears to be undergoing some form of structural change, there appears to be no let-up in the growing numbers of self-employed, especially amongst older age groups.

Most would agree with the Resolution Foundation Report authors who conclude there are problems ahead for those that don’t build up a pension pot. Here we are not talking about the rich or well off but those amongst the self-employed who might run into difficulty getting mortgages or credit. In other words’ individuals who don’t have much capital behind them. This makes this group especially vulnerable to chronic illnesses.

The Report’s authors conclude that if high numbers of self-employed are set to become a fixture then the Government needs to create measures geared to this group. This includes adequate access to housing and credit and encouraging people to build savings and pensions.

Cash flow is something entrepreneurs running businesses of all shapes and sizes are all too familiar with. It may seem as if there is never enough cash around for non-essential items.  However prudent financial management would include shoring up finances. If the Government can help encourage such a shift in thinking that can only be a good thing.