Pension saving plummets when employees move into self-employment

15 Jun 2026

More than three-quarters of employees who consistently saved into a pension stop doing so when they move into self-employment, according to research from the Institute for Fiscal Studies (IFS).

Currently, only around one-in-five self-employed workers save into a private pension, compared with around four-in-five employees, says the IFS.

According to the think tank, there is widespread agreement that there is an urgent need for policies addressing low pension participation among the self-employed, as recently highlighted by the Second Pensions Commission.

The IFS says that a key potential moment for such policies is the point when employees move into self-employment. Currently, even among employees consistently saving in a pension, more than three-quarters stop saving in a pension once they start being self-employed. 

Laurence O'Brien, Senior Research Economist at the IFS and one of the authors of the report, said: 'Boosting private pension saving among the self-employed is becoming an urgent challenge for policymakers.

'One moment to target is the point when workers move from an employee job into self-employment, where currently over three-quarters of workers stop saving. Ideally, policies could make it easier for these workers to continue saving in the workplace pension pot they had with their previous employer.

'For example, employers or pension providers could potentially be required to provide more details on how to continue saving in the same pension pot when employees leave their job.'