Self-Employed Would Benefit From Enrolling In A Retirement Savings Scheme
Nearly two-thirds of self-employed people have nothing in their retirement savings. Freelancers face difficulties in old age because of the pension rule changes curbing tax perks to suit the wealthy.
The investment firm Fidelity’s new survey of 1,028 self-employed and 1,032 employed workers, found that 62% of self-employed people have no pension, almost doubling employed workers (32%).
In 2011 the annual limit you could pay into your pension and still be eligible for tax relief was dropped from £255,000 to £50,000 and now stands at £40,000. The limit can even be as low as £10,000 for those earning £150,000 or more.
A sole trader selling their business for £210,000 and putting this money into a pension would make their allowance for that year £10,000. What’s more is if they accidentally paid in more than their capped rate, they would have to pay a large tax bill.
Steve Webb, director of policy at Royal London, argues: “Every time the Treasury attempts to cut the cost of tax relief they add new complications such as the ‘tapered annual allowance’ and the ‘money purchase annual allowance’ which make the system bewilderingly complicated. These new figures provide no justification for further fiddling and salami slicing with a system that should be stable over the long-term.”
Philip Hammond, the chancellor of the exchequer, said on pensions: “Delve deeper and there are clues that all but the highest earning self-employed workers are turning their backs on pensions. It’s a reminder that a lot rests on the government’s work where they’re testing nudges to boost saving among the self-employed. If this proves ineffective a more radical shake-up to the incentives will be required.”
Delays At Luton Airport As Addison Lee Drivers Strike Over Shockingly Low Pay
Minicab drivers at Luton airport are striking over pay rates that average just £4.72 an hour in some cases, well below the over-25 statutory minimum wage of £8.21.
Judges have repeatedly ruled that drivers for gig economy firms including Addison Lee and Uber should be treated as workers entitled to the national minimum wage and paid holiday, but appeals by the companies mean changes are yet to be introduced.
So in response, about 50 minicab drivers for Addison Lee contracted to work at the UK’s fifth busiest airport are stopping work for 24 hours on Wednesday.
Imran Iqbal, one of the striking drivers, told The Guardian that: “On an average week, I’m working 65 hours and taking home less than £350. So while I’ve been earning far below the minimum wage, Addison Lee’s owners made tens of millions of dollars last year. We have tried talking to the company, we have tried protesting and now we are left with no other option but to strike.”
A spokesperson for Addison Lee also told the press: “We engage directly with our self-employed Luton driver partners to help them earn a decent living. We have invested almost £7m in our Luton operation since 2016, which has benefited drivers directly, and average Luton driver partner pay increased by 11% between 2017 and 2018. We regularly review our driver deal to ensure it is competitive.”
New Benefit Supporting Entrepreneurs
A new social insurance benefit scheme was announced on Monday, that will protect self-employed workers who lose their jobs.
Set to be introduced in November, this “safety net” initiative will, according to Regina Doherty, the social protection minister, provide peace of mind to entrepreneurs by telling them that the state will be there to support them if their business closes.
With a maximum payment of €203 per week, the scheme will provide nine months worth of benefits for individuals with 260 or more self-employment PRSI contributions paid and six months for those with fewer than 260.
The Gig Economy Needs To Fulfill The Demand For Autonomy
While companies like Uber and Deliveroo paint a picture of their drivers that usually involves strong and independent entrepreneurs that like to choose their own hours, the truth can actually be quite different. Adi Gaskell gives a brilliant summary of all the issues facing gig workers in his most recent article in Forbes.
Opportunities Await In The Automated Future
Research from Deloitte has discovered that 38% of companies expect certain jobs to be eliminated by automation within the next three years. AI will also be altering all jobs in some way. Therefore, businesses need to look into how they will be coping with the automated future.
The structure of the workplace is changing. According to Deloitte, more than 40% of the US in the workforce is part of the “gig economy”. With AI taking over the more monotonous aspects of work, there leaves more room and need for creatively minded people to fill jobs and also more freedom to work remotely.
A Quarter Of UK Workers Can’t Tell If They Were Paid Correctly
According to new research from the ADP, a quarter of freelancers wouldn’t be able to tell if they have been paid on time, while 10% wouldn’t even be able to tell if their payslip was filled correctly.
The ADP Workforce View research surveyed over 10,000 employees throughout Europe to investigate how employees feel about current issues in the workplace and the future of work.
Itemised Payslips, a new legislation that came into force on 6th April 2019, has given contractors, freelancers, and zero-hour workers the right to receive a detailed payslip from their employer for the first time regardless of their employment status.
This new legislation places responsibility on employers to ensure they are paying their contracted workers fairly, and are held accountable if they are not. Itemised payslips will enable freelancers to easily track the hours they have been paid for and provide pay transparency for both employers and contractors.
The dynamics of the workforce are changing and as the popularity of freelancing increases, it is vital that contracted workers are given the same rights as salaried workers.