Editor | 16 January 2018
Forty percent of freelancers want to retire before their sixties

Forty percent of freelancers want to retire before their sixties

A survey of self-employed workers has found that more than four in ten freelancers hope to retire before they turn 61.

The new research focused on freelancer’s plans in 2018 and beyond. But with separate research suggesting that freelancers are not saving enough for their retirement – careful money management will become more important for self-employed people.

Cloud accounting software packages like Xero and FreeAgent can help freelancers save for their future.

Retire at a reasonable age

The survey evidence revealed that 35% of people hope to retire between ages 51 and 60, while 6% hoped to do so between 41 and 50 and 1% hoped they would retire while still under 40.

Almost half (48%) of the freelancers surveyed said they hoped to retire between ages 61 and 70 while 10% said they would retire when they were over 71.

But other research suggests that this may be tricky if freelancers keep up with current levels of saving.

Since April 2016, self-employed workers have built up the same state pension as people in more traditional employment. But for many freelancers, this will not be enough to retire with. 

Research from the Financial Conduct Authority suggests that only 23% of self-employed people will rely on a personal pension, with others turning to state pensions, personal savings and proceeds from selling their business.

Other research from Drewberry suggests that of the self-employed people who are putting money aside for retirement, more than half had no idea how much they have saved and 91% are contributing 10% or less of their take home pay to a pension.

One of the recommendations from the Taylor review into self-employment is that self-employed people should automatically be enrolled into a pension scheme – contributing 4% of their income, unless they opt out.

The government had promised to tackle self-employment auto-enrolment in their pre-election manifesto, but they broke this commitment in December saying instead that they would look at using technology to encourage people to save.

Miles Grady, Director at Cloud Accountant said: “It’s clear that most freelancers want to retire at a reasonable age – with some even wanting to retire before their counterparts in traditional employment.

“Self-employed workers can often demand higher wages than salaried workers, so this makes sense. But the number of self-employed people who aren’t saving for retirement is concerning - not just for those workers, but for the Government and society as a whole.

“In the absence of pension contributions and Government support on things like auto-enrolment, it can be tricky for freelancers to save for their retirement. But accounting software like FreeAgent gives freelancers a clear view over all their finances.

“The software can help self-employed people make better decisions about their future.”

How cloud accounting can help you save for retirement

Cloud accounting software packages like FreeAgent and Xero help freelancers save money by giving them the clearest possible view over all their finances.

The software systems help self-employed people track all their incomings and outgoings in real time.

For example, it lets them know how much they should be saving to pay off their tax bill and can help them understand how much they have left over each month to save for retirement.

If you hire anyone, the systems are also set up for with auto-enrolment provisions, allowing you to take care of your pension responsibilities quickly and easily.


To learn more about FreeAgent or any of our cloud accounting solutions please speak to a member of the team today. Call: 0808 281 0303.