Only four per cent of self-employed workers relying solely on self-employment income are currently saving into a pension, a senior government minister has admitted, describing the situation as a “catastrophe” affecting millions across Britain.
Only 4% of Self-Employed Put Money Aside
Pensions Minister Torsten Bell made the remarks while addressing delegates at The Investing and Saving Alliance Annual Retirement Conference 2026, calling for substantial reform to extend pension saving beyond the employees currently covered by automatic enrolment.
According to Office for National Statistics figures, there are approximately 4.57 million self-employed workers in Britain, representing around 13.1 per cent of the total workforce. Bell warned that pension participation among this group has suffered what he termed a “complete decimation,” falling from roughly half to below one-fifth overall.
“If I just look at the ones we’re most worried about, who just have self-employment income… four per cent are now saving into a pension. It’s a catastrophe,” he told the conference.
The picture across the broader working-age population is also troubling. Bell noted that when looking beyond those covered by workplace schemes, only 55 per cent of working-age adults are currently saving into a pension, meaning roughly half are not saving anything at all towards retirement.
Automatic Enrolment Hailed as Success, But Coverage Gaps Remain
Bell acknowledged that automatic enrolment has produced significant results since its introduction, with participation among eligible employees rising from approximately 55 per cent in 2012 to nearly 90 per cent today. He described this shift as a “total triumph,” though cautioned that the headline figure obscures persistent shortfalls among lower-paid workers, younger employees, and the self-employed.
The minister was candid about the limitations of the current system, arguing that savers are effectively abandoned at the point when they most need guidance. “At the moment, we’re like, don’t have any engagement, and then get to 67, and suddenly you need to become an absolute financial expert,” he said.
Bell also defended the government’s guided retirement proposals and ruled out any return to compulsory annuity purchases, while insisting that those enrolled through automatic enrolment must receive good outcomes. “We have basically forced the British public into saving for pensions — it is our job to make sure they get good returns on those pensions while they’re invested,” he added.
To address what it describes as a long-building savings challenge, the government established the Pensions Commission in July 2025. It is expected to deliver its final recommendations in early 2027, examining why future retirees risk being worse off than those leaving the workforce today. Baroness Jeannie Drake, the Pensions Commissioner, said the situation “demands a renewed national settlement on pensions” and described the moment as an opportunity “to renew a social contract that commands confidence across the country.”
Before Parliament rises for the summer recess, ministers are set to publish an updated roadmap outlining their pension reform agenda alongside a five-year implementation timetable.
