Study after study shows that self-employed people face a real risk of inadequate retirement incomes – a concern also recognised in the current Pensions Commission’s Terms of Reference. In our research, six in ten self-employed people told us they are not confident they will be able to provide financially for their retirement.[1] This aligns with existing analysis suggesting that only two in ten contribute to a pension (compared to eight in ten employees) and three quarters will not meet minimum retirement standards based on their pension savings alone.[2] Even when other savings are considered, fewer than six in ten self-employed people are actively putting money aside for later life.[3]
But it’s not a question of motivation: three quarters of self-employed people in our research agree it is important to put money aside for later life.[4] The challenges lie in practical barriers. Affordability is one, but just as important are the behavioural barriers that auto-enrolment successfully addressed for employees: not knowing where to start, limited headspace to think about saving for retirement, and inertia. Our research finds that defaults can be just as effective for self-employed people as they are for employees. In an online experiment simulating a savings journey, more than 90% of self-employed participants started saving for retirement when defaulted in (with the remainder opting out), compared with just 25% saving when they had to opt in.[5]
There is an additional barrier that is particularly acute for self-employed people: the need to keep some savings accessible. Everyone – whether self-employed or in employment – needs access to savings to deal with unexpected costs. But with incomes that are often volatile and almost always uncertain, this need is arguably more front of mind for self-employed people. As one participant put it: “People who work for a company, they have the same pay from month to month. But I don’t know what I’m going to make, so I can’t plan ahead.” Locking money away for the long-term before an accessible savings buffer is in place could therefore increase financial strain. This is a real concern, given that one in four self-employed people have less than £1,000 in savings.[6] Any attempt to support long-term saving therefore needs to account for liquidity alongside retirement saving.
Our research suggests that long-term savings products with a built-in accessible element can meaningfully increase participation. the online experiment described above, 97% of self-employed participants started saving when defaulted into a hybrid product, compared with 93% when defaulted into a pension-only option.[7] A small, but meaningful difference – and one that was larger for those with more volatile incomes. There is also a clear preference for this approach: in an earlier phase of our research, 57% of self-employed people we surveyed favoured a hybrid solution, compared with 23% who preferred a pension-only product.
This reflects a consistent finding across our research, for self-employed people and employees alike: supporting short-term financial resilience can strengthen, rather than undermine, long-term saving. Policies and products that focus solely on retirement saving, without accounting for liquidity needs, are unlikely to be as effective as approaches that build in accessible savings.
We are now launching the next phase of our research to answer some of the open design and policy questions: What impact would a hybrid savings solution have in the real world? How should contributions be balanced between short- and long-term saving? How can these solutions be implemented in a commercially viable way? And what changes to regulation would be required to make them possible at scale?
Please get in touch if you work for a financial services firm or business software provider offering services to self-employed people and you would like to contribute to the next phase of our research.
Ruth Persian, Associate Director, Research and Innovation
To stay up to date with our latest research and events, sign up to our mailing list.
[1] Nest Insight (2020), The impact of Covid-19 on self-employed people’s saving outlook
[2] Institute of Fiscal Studies (2024), Private pensions for the self-employed: challenges and options for reform
[3] IPSE (2026), The resilience gap: Self-employed Finances in Focus
[4] Nest Insight (2020), The impact of Covid-19 on self-employed people’s saving outlook
[5] Nest Insight (2025), Designing self-employed autosave – Exploring an opt-out approach to retirement saving for self-employed people on a banking platform
[6] Nest Insight analysis of the FCA’s Financial Lives 2024 survey
[7] Nest Insight (2025), Designing self-employed autosave – Exploring an opt-out approach to retirement saving for self-employed people on a banking platform
