New savings pilots launch to support self-employed

Nest Insight has launched two new pilots to trial flexible savings systems that are designed to fit with self-employed people’s "variable income and future uncertainty".

Nest Insight is collaborating with PenFold and Moneyhub on the two pilots, which are also supported by the Department for Work and Pensions (DWP) as part of a multi-year programme of work testing ways to help self-employed people save for retirement.

The group emphasised that whilst automatic enrolment has greatly expanded workplace pension saving participation, some savers, such as the self-employed, are still not benefiting.

Indeed, statistics from the DWP previously showed that only 16 per cent of the self-employed are actively saving into a workplace or personal pension, compared to 88 per cent of the working population eligible for auto enrolment through their employer.

The pilots will therefore look to test different forms of flexible savings solutions and nudges, after previous Nest Insight research suggested that control and flexibility were important factors for the self-employed when saving.

In particular, the solutions being trialled include supporting people to save a percentage of income and giving the choice to connect different kinds of savings vehicle to save into for the future.

They will also nudge people to save at relevant moments, for example when they receive a large payment, and to save some of the difference between monthly income and expenditure in months when income is higher.

Commenting on the plans, Pensions Minister, Guy Opperman, said: “Automatic enrolment has succeeded in transforming pension saving with more than 10 million workers enrolled into a workplace pension to date, and it is important that the self-employed are not left behind.

“Pilots such as these are vital in understanding how to better help self-employed people achieve the retirement they want.

“We have worked with Nest Insight to ensure a variety of flexible saving options are tested and I look forward to reviewing the outcomes.”

Adding to this, Nest Insight director of research and innovation, Jo Phillips, emphasised that whilst the low level of saving for retirement by the self-employed is a "well-known problem", there is a "real appetite" amongst this group for saving for the long term.

“But self-employed people have told us that it can be difficult to find ways to save that fit with their lives and context – they often have limited time and headspace combined with variable income and future uncertainty," she explained.

“So far, few solutions have been developed to address these barriers. That’s why we’re delighted to be working with leading fintechs Penfold and Moneyhub to explore how self-employed people interact with these flexible technology-based solutions which we believe could be better suited to their needs.

“We hope these insights will inform the industry and policymakers on how best to support self-employed people to save. The solutions being trialled are intended to be scalable and, if successful, could make it much easier for self-employed people to save towards future financial security.”

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