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Press comment: Is auto-enrolment right for the self-employed?

18/05/2017

If you are covering the Conservative party manifesto please see the following commentary from Old Mutual Wealth head of retirement policy, Jon Greer.

He argues government cannot ‘copy-and-paste’ auto-enrolment legislation for the self-employed and urges the next government to explore creative policy solutions.

The manifesto states ‘…we will continue to support the successful expansion of auto-enrolled pensions, enabling more people to increase their retirement income with help from their employers and government; we will continue to extend auto-enrolment to small employers and make it available to the self-employed…’

Old Mutual Wealth head of retirement policy, Jon Greer says:

Jon Greer“The self-employed appear to be massively under-saving in pensions for their retirement. Recent data show they save far less on average into pensions*, and without Government intervention this is unlikely to change. But a copy-and-paste approach cannot be used to extend auto-enrolment to the self-employed.

“Auto-enrolment works around the infrastructure of the workplace and more creative solutions will be required for the self-employed. The next government will need to look at various options for example, using the national insurance system, or perhaps taking advantage of new opportunities in the planned digital tax system.

“The next government should look to address the pension savings gap of the self-employed. Outside auto-enrolment, they miss out on savings perks like pension tax relief and also an employer contribution that boost the savings of ordinary employees. As a result they risk being worse off in retirement than their peers that have worked for an employer.

“Auto-enrolment in its current form cannot be easily extended to the self-employed. Under auto-enrolment, the employer selects from a range of schemes that meets certain standards, pension providers run savings plans that do not require individuals to make their own decisions, and the valuable tax-relief and employer contributions is automatically added in to the money workers pay-in. This workplace infrastructure doesn’t exist for the self-employed so an alternative solution will be necessary.”

*https://www.gov.uk/government/statistics/family-resources-survey-financial-year-201516:

 

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

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This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.