Nest has revealed its plans to encourage the self-employed to save more for their retirement, following its latest research that has identified three main sub-groups that the self-employed fall into.
The new research, conducted by Nest Insight and I2 Media Research, has found that amongst such a diverse group, and without an employer to manage enrolment and contributions, it’s unlikely that a single solution can reach the whole population and be suitable for all.
The three distinct sub-groups that differ in their attitudes and motivations towards self-employment are those that do it as a need to get by, who focus on today and making ends meet. The next group say that being self-employed enables them to have a good quality of life right now, and the final say that it’s their way of life.
Over the next couple of years, Nest Insight is planning to trial a variety of approaches to increasing saving among the self-employed. Each approach will be suitably targeted at the three different sub-groups.
The ideas include using incentives (such as online gaming, prize draws and cashback schemes), convenience (for instance, a scheme that make it easier to save for the short- and long-term at the same time, and apps that let self-employed people save as they spend) and, partnerships (building savings opportunities into the online platforms that self-employed people already use).
Commenting, Nest Insight executive director Will Sandbrook noted that auto-enrolment has had a “hugely positive” impact on pension savings rates in the UK, but stated that of the five million self-employed workers in the UK, just 17 per cent are saving for their retirement.
“Over the next couple of years, we’re keen to work closely with the pensions industry, academics and government to develop a range of savings propositions and test what works. We believe there are a number of solutions that have the potential to make a very noticeable and positive impact on long-term saving amongst the self-employed.”
The new report, Working for today, preparing for tomorrow, also explores factors that affect self-employed peoples’ perception of their capacity to save, messaging that could motivate behavioural change, best practice for communications and points when it may be possible to present self-employed people with new savings mechanisms.