Why self-employed women aren't all pension-prepared

More than a third of self-employed women in the UK are saving nothing into a pension, according to Scottish Widows

ARE you a female entrepreneur? Do you own your own business or work as a freelancer?

Former US President George W Bush is rumoured to have said: “The trouble with the French is that they have no word for ‘entrepreneur’”, which brings us to this week’s theme: women who are in business for themselves.

If this means you, then you are not currently subject to auto-enrolment into a pension scheme.

No surprise then, that over a third of self-employed women in the UK are saving nothing into a pension, according to Scottish Widows’ brand new Women and Retirement report for 2019.

This means that around 600,000 of the UK’s 1.7 million female self-employed are not saving. Of those who do save, more than half (56 per cent) are saving ‘inadequately’, which Scottish Widows (SW) defines as less than 12 per cent of salary.

The problem is most pronounced among self-employed women at the lower end of the earnings scale. Of those earning less than £20,000 a year, four out of five fall short of this magic figure of 12 per cent.

They’re a lot worse off than their counterparts in employment, of whom over half are saving at least the 12 per cent.

This is due to the pressures that are on you, when you’re working for yourself. As a self-employed woman, your focus is on paying your tax bill, and the notion of pension saving may be a desirable ideal which slips into second place.

Women tend not to seek bank or outside finance to set themselves up, so if you are a young entrepreneur, perhaps you have depleted your personal savings to start your business. You may be painfully aware that nearly a third of ‘new starts’ fail in the first two years. Again, breaking even and financial survival takes centre stage, and pension saving is pushed into the shadows.

On the brighter side, SW says that when self-employed women do pay attention to pension saving, they are among the top savers in the country. Not only do those who are saving exceed the 12 per cent ‘adequate’ level, but they save an average of 16 per cent, making them more ‘pensions savvy’ than self-employed men, who save 14 per cent.

This level is also well ahead of the current minimum for auto-enrolled women in workplace pensions, which is 8 per cent.

One crucial mistake that self-employed women (and men too) make is that they regard the company as their pension.

There’s a well-known nugget of wisdom in the industry that says: “The company shouldn’t BE your pension, the company should PAY your pension.”

This is where good financial planning comes in. An hour sitting with an independent financial adviser to make a plan for your retirement can start the ball rolling and after that, you won’t even notice you are saving. And remember, it’s the first pound you pay into your pension that works hardest for you, and grows most strongly over the decades.

Now, we should add, before the letters start coming in: the ‘French have no word for entrepreneur’ comment was apparently not a genuine quote from ‘Dubya’, but a bit of mischief by a prominent lady politician in London.

On the other hand, the report of ‘Dubya’ apparently welcoming Stevie Wonder onstage with a wave at the Presidential Gala in 2002 is, however, on video, and after you’ve sorted your pension, may be a good tale to share with your customers this week!

:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at

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