Recommendation 9

The number of self-employed people saving in a pension has declined since the late1990s when it was around 48%, to around 16%. This is in stark contrast to the 88% of workers eligible for auto-enrolment participating in pension saving. Trials to encourage self-employed people into pension saving have not been effective. The former Minister for Pensions told us that the “lessons of automatic enrolment are that default is the only way to get big interventions” and that the aim was to trial this once Making Tax Digital was up and running. The employer contribution has also been key to the success of auto-enrolment for employees, providing an incentive to participate. We recommend that HM Treasury and DWP work together to: (a) set a date to trial ways to default self-employed people into pension saving and; (b) consult on the proposal to increase the main rate of National Insurance paid by the self-employed (Class 4) by 3%, with the option to have the increase paid into a pension if the self-employed person also contributes 5% (including tax relief). Alongside that, the Government should consider how to promote pension saving to self-employed people. (Paragraph 74) Gig economy workers