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Press comment: Is auto-enrolment right for the self-employed?

18/05/2017

If you are covering the Conservative party manifesto please see the following commentary from Old Mutual Wealth head of retirement policy, Jon Greer.

He argues government cannot ‘copy-and-paste’ auto-enrolment legislation for the self-employed and urges the next government to explore creative policy solutions.

The manifesto states ‘…we will continue to support the successful expansion of auto-enrolled pensions, enabling more people to increase their retirement income with help from their employers and government; we will continue to extend auto-enrolment to small employers and make it available to the self-employed…’

Old Mutual Wealth head of retirement policy, Jon Greer says:

Jon Greer“The self-employed appear to be massively under-saving in pensions for their retirement. Recent data show they save far less on average into pensions*, and without Government intervention this is unlikely to change. But a copy-and-paste approach cannot be used to extend auto-enrolment to the self-employed.

“Auto-enrolment works around the infrastructure of the workplace and more creative solutions will be required for the self-employed. The next government will need to look at various options for example, using the national insurance system, or perhaps taking advantage of new opportunities in the planned digital tax system.

“The next government should look to address the pension savings gap of the self-employed. Outside auto-enrolment, they miss out on savings perks like pension tax relief and also an employer contribution that boost the savings of ordinary employees. As a result they risk being worse off in retirement than their peers that have worked for an employer.

“Auto-enrolment in its current form cannot be easily extended to the self-employed. Under auto-enrolment, the employer selects from a range of schemes that meets certain standards, pension providers run savings plans that do not require individuals to make their own decisions, and the valuable tax-relief and employer contributions is automatically added in to the money workers pay-in. This workplace infrastructure doesn’t exist for the self-employed so an alternative solution will be necessary.”

*https://www.gov.uk/government/statistics/family-resources-survey-financial-year-201516:

 

For more information contact

Michael GlenisterOld Mutual Wealth020 7778 963807469 144535michael.glenister@omwealth.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £116.5 billion in customer investments (as at 30 June 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

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This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.