Self-employed over-65s earning more

An increasing amount of workers are choosing to become self-employed, with figures from the ONS revealing the number increased to 4.85 million in September 2017.

Those aged over 65 and self-employed are capitalising from the rising trend, according to a study which defines them as the ‘silver self-employed'.

QuickBooks developer Intuit surveyed 5,000 self-employed and found the average ‘silver self-employed' worker earns around £40,000 a year - almost £7,000 more than the average person who is self-employed (£33,000).

In addition, over-65s who fall in this category work on average 21 hours a week - 7 hours less than the average self-employed worker.

Other findings:

  • 71% were better off financially in self-employment than in full-time employment
  • 68% enjoyed more flexibility working under their own terms
  • 67% expressed being more satisfied with life in general.

Dominic Allon, vice-president and managing director of Intuit Europe, said:

"Self-employment is often associated with the likes of millennials, creatives in design agencies and teenagers writing code in their bedrooms.

"But with bigger savings pools and a lifetime of acquiring skills and expertise combined with economic factors, such as the state pension age increase, ‘silver self-employed' workers are fast becoming an economic force in the UK."

Saving for retirement

Despite over-65s reaping the rewards of self-employment, 41% were concerned on not having enough income.

Saving for retirement if you're self-employed can be a difficult task due to lack of pension scheme and employer contributions, meaning you have to outsource your own pension.

However, there are certain types of pension available to help you save self-employment income for your retirement.

State pension

As like everyone else when aged 65 self-employed people are entitled to the state pension.
The new state pension is £159.55 a week and how you much you receive will be based on your national insurance records.

You need 35 years of contributions to obtain the full state pension.

Pension contributions

The state pension alone will not provide you with enough income for a comfortable retirement, so where can you gather the rest of the retirement income you need?

Self-employed people can save into a personal pension and top-up their contributions each tax year.

There is an annual allowance for pension contributions, which is currently £40,000 for 2017/18.

Contact us to discuss your personal finances.