Britain has the worst record for the self-employed saving for retirement out of 15 countries around the world.
A study revealed that just over half of the country’s army of 4.5 million self-employed had a retirement plan.
This compared with an average third across the other countries.
This adds up to 2.34 million workers who are failing to plan for retirement. Another 4% said they did not know if they had a retirement plan – which could take the number to as high as 2.52 million (56%) of all self-employed.
India topped the table with 88% of self-employed workers with a plan for when they give up working.
State help stalls saving
One factor uncovered by the report was self-employed workers in countries offering less state welfare support were more likely to have pensions and other retirement savings.
Emerging markets such as Brazil, Turkey and China all had self-employed workers better prepared for retirement than developed countries like Britain, France, Spain and Australia.
More than half (52%) of Britain’s self-employed told researchers that they expected to work later than 65 years old, while only a fifth considered they had enough money saved for a financially comfortable retirement.
Fewer than a third (29%) have a financial strategy ready if they must stop working due to disability or illness.
A massive 49% reckon they will have to rely on the state pension to fund their retirement, while 40% are looking to savings or other investments.
Kate Smith, head of pensions for financial firm Aegon, which drafted the survey, said the figures reflected changes in how the self-employed work and plan for retirement.
No formal retirement planning
“Without employer-sponsored plans, the self-employed are flying solo when it comes to pensions,” she said.
“Achieving long-term financial security and peace of mind in retirement requires a rigorous approach to saving and proper planning.”
“While many are concerned about retirement, few were taking any meaningful steps to address their worries.
“With the day-to-day pressures involved in working for themselves, many find it difficult to make plans, but taking time to write a pension plan brings many benefits, not least making it immediately tangible.”
One of the main factors influencing pension planning for the self-employed in Britain was fewer than one in 10 had a formal written-down retirement plan which they could match saving performance against.