Auto-enrolment was one of Britain's genuine policy successes of the past decade. By automatically enrolling employees in workplace pension schemes, it dramatically increased pension saving rates among those in regular employment.
The problem is the word "employees."
The Excluded Millions
An estimated 4.8 million self-employed workers in the UK have no workplace pension. They are excluded from auto-enrolment by definition. Many have no pension savings at all.
The gig economy has added a new dimension to an old problem. Workers classified as contractors — whether driving for a platform, delivering food, or providing freelance services — often lack the financial security of employment without the independence of genuine self-employment.
The State Pension Gap
The new State Pension provides a foundation of £11,500 per year. For most people, this is not enough to live on — particularly in areas where housing costs remain high.
The gap between what the State Pension provides and what a comfortable retirement requires needs to be filled either by private savings or by increased state provision. Currently, it is being filled by neither for a significant proportion of the population.
What Reform Could Look Like
Several proposals are on the table. Extending auto-enrolment to the self-employed through the tax system is technically complex but not impossible. The government has commissioned a review; its recommendations are expected later this year.
