DWP and software firms exploring retirement savings platforms for self-employed – pensions minister
Laura Trott claims that automatic enrolment remains unsuitable for freelances – but other digital options may have a part to play
Credit: 3D Animation Production Company/Pixabay
The Department for Work and Pensions is working with software companies to explore options for the potential use of digital platforms to support self-employed people save money for retirement.
Legislation passed 15 years ago requires employers to automatically enrol into a pension scheme any employees aged 22 and upwards who earn at least £10,000 a year. To support the rollout of the automatic enrolment scheme – which began in 2012 – a public corporation was created: the National Employment Savings Trust, which operates as an arm’s-length body of the DWP.
According to the pensions minister, Laura Trott, a review of the automatic enrolment programme undertaken by the department in 2017 – five years after its implementation began – “confirmed that the… framework cannot be straightforwardly extended to people who are self-employed, as by definition there is no employer to enrol them into a scheme, select a scheme, or make contributions”.
But the government “remains committed to enabling self-employed people to achieve greater financial security in later life”.
“Finding effective and enduring solutions is a long-term challenge given the highly diverse nature of this group, with varying incomes, assets, and employment experiences,” she added.
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Nest Insight – a dedicated research function of the publicly owned pensions scheme – recently led a “trialling and research programme delivered… [which] provided a useful platform to move forward” with work on how government can support the self-employed save for their long-term future, according to Trott. Work is now ongoing – in conjunction with technology firms – to study possible options for online tools that could enable this, she added.
“We are working with software providers to explore the feasibility of building and testing retirement savings solutions in digital platforms, such as accountancy software and payment platforms, used by self-employed people to manage their money,” Trott said.
The minister’s comments were made in response to a written parliamentary question from Gregory Campbell, the Democratic Unionist Party MP for East Londonderry.
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