Self-employed savers' pension contributions rise by 27% in H1

Monthly pension contributions of both self-employed and employed workers rose in the first half of 2021, with the former group’s contributions increasing from £543 in H1 2020 to £690 in H1 2021, according to PensionBee.

Using data from its own customers, PensionBee also found that employed savers’ monthly contributions increased from £374 in the first half of 2020 to £508 in the same period in 2021.

The provider noted that self-employed savers’ increased contributions came despite the group being “among the workers hit hardest by the economic fallout of the pandemic”, citing data from the Centre for Economic Performance which showed 37 per cent of the group had worked 10 hours or fewer per week in January 2021.

The same study had also shown that just under half (46 per cent) of self-employed workers had difficulty paying for basic expenses in the same month.

However, this was reflected more by PensionBee’s data showing that self-employed savers over the age of 55 had withdrawn more of their pension savings during the first six months of the year, with the average amount increasing by around half (47 per cent), from £9,309 to £13,722 between H1 2020 and 2021.

Conversely, employed customers aged 55 and above kept more of their money invested, with withdrawal amounts for this group falling by 8 per cent from £10,602 to £9,765.

PensionBee reasoned that without as many employee benefits to fall back on, such as sick pay or the furlough scheme, self-employed savers were more likely to turn to their pension savings to provide some financial support.

PensionBee CEO, Romi Savova, commented: “It’s encouraging to see both employed and self-employed savers prioritising their pensions by increasing their monthly contributions, particularly during recent lockdowns.

“As always, we would encourage those who have a larger disposable income to continue saving where possible, and for those in retirement to keep as much of their pension invested until the exact moment they need it to ensure they’re well-positioned to enjoy a happy retirement.”

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