Raising National Insurance contributions could nudge the self-employed into saving for their pension, Royal London director of policy Steve Webb has said.

Speaking at the Trades Union Congress People and Pensions Conference today, the former pensions minister voiced his concerns about the rapidly depleting levels of self-employed workers saving for retirement.

“One in seven self-employed people are saving into a pension” he highlighted.

While Webb said he doesn’t see the government enforcing compulsory saving for the unemployed, he did state that we should “Use the system we’ve already got and graft national insurance into giving people pensions on top”.

Nonetheless, Webb pointed out that when asked about retirement savings for the self-employed, the government respond with the Lifetime ISA. However, Webb highlighted: “you can’t open a LISA over 40 years of age and the average self-employed person is over 40”.

Instead, he explained that his proposed solution to the self-employed pension shortfall would be increasing the current nine per cent national insurance tax to 12 per cent. This three per cent “mirrors auto-enrolment contributions” he said.

From this, employees would be given a choice as to whether to “let Philip Hammond have that percentage or name a pension scheme to contribute to”.

“It is the closest thing I can imagine short of compulsion… so my proposition is, soft-compulsion, something that looks a bit like this,” Webb concluded.

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