Flexible savings trials to bridge the freelance pensions gap

I’m going to simply cut-and-paste from the press release from Nest Insight here as I think it says everything that needs explaining well enough:

Nest Insight has launched two new pilots to trial flexible savings systems that are designed to fit with self-employed people’s “variable income and future uncertainty”.

Nest Insight is collaborating with PenFold and Moneyhub on the two pilots, which are also supported by the Department for Work and Pensions (DWP) as part of a multi-year programme of work testing ways to help self-employed people save for retirement.

The group emphasised that whilst automatic enrolment has greatly expanded workplace pension saving participation, some savers, such as the self-employed, are still not benefiting.

Indeed, statistics from the DWP previously showed that only 16% of the self-employed are actively saving into a workplace or personal pension, compared to 88% of the working population eligible for auto-enrolment through their employer.

The pilots will therefore look to test different forms of flexible savings solutions and nudges, after previous Nest Insight research suggested that control and flexibility were important factors for the self-employed when saving.

In particular, the solutions being trialled include supporting people to save a percentage of income and giving the choice to connect different kinds of savings vehicle to save into for the future.

They will also nudge people to save at relevant moments, for example when they receive a large payment, and to save some of the difference between monthly income and expenditure in months when income is higher.

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