Self-employed workers are contributing to their retirement sporadically, with 87 per cent making fewer than six one-off payments a year, data from PensionBee has revealed.

Its analysis explored one-off contribution behaviour among more than 20,000 self-employed PensionBee customers over the past year.

It identified three groups by contribution frequency: those contributing sporadically, people who contributed between six and 12 times (9 per cent), and those who made 12 or more one-off payments (4 per cent).

Low frequency contributors were making larger individual deposits, averaging £1,036 per transaction, while medium frequency contributors made average deposits of £642 and high frequency contributors averaged £355.

Although those making more frequent contributions deposited less per transaction, they accumulated an average of £7,760 over the year, while medium frequency contributors saved £5,394 a year and sporadic contributors averaged just £1,763 annually.

PensionBee said the findings reflected the reality of being self-employed, with variable and unpredictable income making regular commitments more difficult.

Low frequency savers accounted for nearly 70 per cent of total contribution value on aggregate, but this was concentrated among a small number of people making very large deposits.

The pension provider argued that auto-enrolment would help address the issue of sporadic self-employed pension saving, as contributing consistently can reduce the impact of volatility rather than trying to time a lump sum, and have a positive psychological effect by providing consistency.

“What this data shows is that contributing little and often into a personal pension is often the best way to build a strong retirement pot,” commented PensoinBee chief business officer UK, Lisa Picardo.

“For most of the self-employed, this approach is the one most likely to soften the impact of volatility, whilst also likely being less stressful in comparison to making a handful of lump sum deposits.

“What is particularly striking is the small group contributing every single month by choice, is their election to mirror the saving habits of their employed peers who are auto-enrolled. They are not being nudged or defaulted into it, yet they’ve decided to treat their pension like any other regular financial commitment.

“If more self-employed savers understood how well it fits around the way they actually work and earn, we believe far more would engage the same way.”

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