Online pension provider PensionBee has unveiled a new product catering for the self-employed, as research reveals only 24 per cent currently have a pension.
Recent analysis from the Institute for Fiscal Studies shows that the number of self-employed workers has grown rapidly over the past two decades, yet the proportion saving into a private pension has fallen dramatically. Numbers stood at 48 per cent in 1998 but have fallen to just 16 per cent in 2018.
Nearly 80 per cent of working-age employees contributed to a pension in 2018 due to the introduction of auto-enrolment. Meanwhile, 2019 figures from trust-based workplace pension scheme Nest suggests that only 24 per cent of self-employed workers are saving into a pension
PensionBee, currently seeking a listing on the London Stock Exchange, says its new flexible pension for the self-employed enables savers to pay into their pension according to their current income, with no minimum contribution amounts.
The product is available exclusively to sole traders and directors of limited companies without an existing workplace or private pension to consolidate. Savers can sign up for free and make one-off or regular contributions via bank transfer or Direct Debit.
There are nine investment options, including a new Fossil Fuel Free Plan which completely excludes fossil fuel producers and persistent violators of the UN Global Compact. All-in fees range from 0.50 to 0.95 per cent, depending on the plan chosen, with 50 per cent off for the portion of savings over £100,000.
Romi Savova, CEO of PensionBee, said: “We’re delighted to offer our award-winning pension product to a growing proportion of the UK workforce who have long been underserved by the pensions industry. Without the benefits of auto-enrolment, the self-employed are at a significant disadvantage and need access to simple and flexible products urgently if they are to avoid a shortfall in later life.
In the absence of old workplace pensions to provide a head start, we know that the thought of saving from nothing can be daunting for many self-employed consumers, which is why we’ve made it as easy as possible for them to open a pension and put money aside whenever their business allows.
The self-employed currently make up 20 per cent of the PensionBee customer base, so we know their needs well and are committed to helping many more self-employed consumers plan for a happy retirement and achieve better financial outcomes.”
According to PensionBee, consumers are increasingly managing their pensions online. In 2020, it saw a 96 per cent increase in PensionBee app users, as well as an 85 per cent growth in the number of invested customers year on year.
Pension and Wealth Management Sectors turn to Electronic Transfers
Elsewhere in response to the increase in remote working, data analysis by financial services consultancy and software specialist Altus shows that 69 new providers turned to electronic transfers in 2020. The analysis further shows that most of the new providers supporting electronic transfers come from the Wealth Management, Fund Management and Pension sectors.
Altus Product Sales Director Howard Finnegan said: “The financial services industry has had to adapt quickly in a very challenging year. With home working becoming the norm and the threat of Covid-19, the industry has had to automate manual processes and remove paper from their processes. Providers have naturally turned to an electronic process, which not only allows them to streamline their existing operations but also protects their staff and counterparts from virus propagation.
“With the UK economy unlikely to return to normal while we continue to grapple with the pandemic, the financial services industry will need to continue to improve its overall efficiency to deliver good services for investors. We expect to see more providers turn to electronic transfer processes to improve their internal operations and enhance the digital experience for their clients.”