Only a quarter of self-employed workers are saving into a pension, even though three quarters think its important to do so, according to new research from the Department for Work & Pensions (DWP) and government auto-enrolment scheme Nest.
Despite the majority of workers recognising the importance of saving into a pension, over half said that they'd like more guidance on how best to save for retirement.
They have also begun trials to test the most effective ways to increase the number of self-employed people saving into a pension and will publish the results in 2020.
Pensions Minister Guy Opperman said: 'We want to boost the future prospects of millions of hard-working self-employed people, including younger and lower-paid workers, and that's why we're trialling various approaches which could help them plan ahead financially for later life.'
Here, we round up top savings tips from the report and a few others that could help self-employed workers save up enough for retirement.
Which? research has revealed that, on average, a single retired person needs an annual income of £20,000 to have a comfortable lifestyle. This increases to £27,000 for a retired couple.
A comfortable retirement covers the purchase of everyday essentials such as groceries, transport and utilities, as well as things like leisure activities and the occasional holiday.
To generate this income, you'd need upwards of £200,000 saved in a pension fund, although this may vary depending on how you access it, how it's invested and how long your retirement is.
So, how can you top up your savings to make sure you have enough?
There currently isn't an auto-enrolment scheme in place for self-employed workers but there are a number of pension saving options to choose from:
A personal pension allows you to choose your own pension provider and pay in a set amount each month.
There are three types of personal pension:
Personal pensions offer 20% tax relief for basic-rate taxpayers, which is added to your pension pot.
You'll also get a 25% tax-free lump sum.
Any savings you put into it before your 50th birthday will get a 25% bonus from the government. Until you hit 50, you can add up to £4,000 a year - which would earn you a £1,000 bonus from the government.
You can withdraw the money at any time, but if you do so before you turn 60, the government will take 25% of the total amount you withdraw as a penalty. The only exceptions are if you're buying your first home or if you're terminally ill.
We've rounded up four ways to boost your pension if you're self-employed to make sure you have enough saved to see you through retirement:
Setting up regular payment contributions into a pension could ensure that you're saving enough for retirement.
Over time, this amount will keep building up, boosted by investment returns and compounded returns.
According to the Nest report, putting away as little as £2.50 a day could help you build up a decent pension pot.
As well as making regular contributions, it's possible to add lump sums to your pension as well.
If you have a regular expense that's no longer needed, you can redirect that extra money to your pension instead. For example, once you finish paying off a car loan, you can use those payments towards your pension fund.
It's a quick and simple way to give your retirement savings a boost while sticking to your everyday budget. And, if your income increases, putting all or part of that sum towards increasing your retirement savings can also help give it a boost.
Monitoring your pension regularly will help you keep your savings on track. You can also check in on the performance of your pension fund.
Contact your pension provider to find out the best way to keep track of how your pension is tracking.
Consulting an independent financial adviser (IFA) can help you put a pension savings plan in place and identify new ways to maximise your income.
An IFA must provide advice that is based on comprehensive analysis of the market, unbiased and not influenced by product providers.