‘You can’t carry bricks into your 60s’: Self-employed left behind as pension contributions hit record £14.6bn
Personal pension contributions hit a record high of £14.6bn in the 2023/24 tax year, up from £12.9bn the year before, new HMRC data reveals. But despite the rise in contributions, the number of people actively paying into personal pensions has actually dropped.
According to the figures published this morning by HMRC, 6.81 million people made personal pension contributions in 2023/24, down from 6.85 million in 2022/23. The number of self-employed individuals contributing rose slightly, from 350,000 to 360,000, with their total contributions increasing from £2.3bn to £2.7bn.
Experts have welcomed the rise in overall contributions but warned that millions, especially those working for themselves, are still dangerously underprepared for retirement.
Scott Gallacher, director at financial advisers Rowley Turton, described the stats as a “mixed picture”.
He said, “The rise in total personal pension contributions to £14.6bn is good news, but the slight drop in individual contributors is more nuanced than it seems. While some savers may be stepping back, it’s more likely that auto-enrolment is doing its job—reducing the need for individuals to contribute separately into personal pensions.”
However, Gallacher warned the modest rise in self-employed savers “is nowhere near enough”.
“Without auto-enrolment for this group and clearer guidance on tax benefits, millions risk facing serious hardship in later life. And unlike office workers, many self-employed people can’t just 'work a bit longer' — it’s hard to clean windows, replace roofs, or carry bricks into your late 60s. We urgently need a solution tailored to them.”
David Stirling, director at Mint Mortgages & Protection, agreed the self-employed are being left behind, adding: “The government needs to take steps to help this sector, who often live hand-to-mouth without thinking of their financial futures.
“Whilst auto-enrolment has been quite successful for employed individuals, if the government improved the pension relief available for sole trader contributions, they could entice more of this sector to invest.”
The lack of clarity and ever-changing rules around pensions is also deterring would-be savers, according to Ross Lacey, director and independent financial adviser at Fairview Financial Management.
He said, “Pensions can be seen as complex and confusing. With there being endless conversations from the government around potential changes to tax relief, lump sum allowances, contribution limits, and inheritance tax treatmen,t to name a few, there’s a real risk of losing the faith of people in pensions.
“This could seriously impact the rate of savings going forward, which is the opposite of what the government is looking to achieve. A campaign on the benefits of pensions and a commitment to end the constant tweaking of rules might set a solid foundation for increased uptake and contributions across the board.”
The figures are the latest sign that while auto-enrolment is quietly doing its job for millions of employees, the self-employed are still being left out in the cold.
