More Pensioners Going Self-Employed

27 - 02 - 2013

Almost one third of people working beyond state pension age are self-employed – more than double the proportion of that of working age people – according to information released by the Office of National Statistics (ONS).

13.5% of working age people are self-employed, whereas self-employment accounts for 31.3% of those of retirement age, according to an ONS report focussing on pension trends in April-June 2012.

More men than women were found to be working at or above the state pension age for the first time since comparable records began in 2005. This may be down to the fact that the state pension age for women has been increasing, but the ONS Pension Trends report stated that ‘other factors might also be involved’.
The report also found that, after state pension age, men do different types of work to women, with men likely to occupy more senior roles.
Women working beyond state pension age were likely to be employed as cleaners, administrative workers or in professional occupations. Men of retirement age, however, were likely to be employed as managers, directors, senior officials, in professional occupations or skilled trades.
The older workforce also showed a preference for part-time work, with around 67.2% of those who were working after the state pension age doing so on a part-time basis, the report found.
For many, the decision to work beyond the state pension age may be the result of their private pensions being lower than they might have expected, according to some financial advisers.
‘Many self-employed people will not have had access to a company pension scheme and so have failed to put enough aside; others have banked on the sale of their company being their pension but this never materialised. It's always a high-risk strategy but too many company directors rely on this,’ said Craig Palfrey, from independent financial advisers Penguin Wealth.
However, the decision to carry on working may not be based on purely financial factors.
‘[I]n many cases, it is because newly retired people simply get bored. Having worked full-time all their lives in an employed role, and formally retired, they then take up self-employed consultancy work, which is often remote,’ Mr Palfrey added.
‘The internet has certainly made it far easier for people to work from home and supplement their retirement incomes.’
Online freelancing marketplace, PeoplePerHour, say they have many people of pensionable age using its services.
According to PeoplePerHour, the most common freelance jobs for women include bookkeeping, crafts and tutoring and the top freelance jobs for men include IT, sales and accounting.
Steve Lowe of Just Retirement advises people to plan now if they do not wish to work beyond the state pension age.

‘Today’s data reaffirms what we already know, people are working longer and retiring later, but this is happening at a rapid pace,’ he said.

'It is vital that those approaching retirement age properly plan their retirement choices to make the most precious pensions savings and other assets.'
Considering self-employment after retirement?

If you are considering coming out of retirement to go self-employed, Foremans can help.

Whether you are a first-time or experienced self-employed worker, we will be happy to talk you through the range of working arrangements available to you.

With Foremans, you can be assured that you’re making the most of your income, as we provide a full range of tax planning, book keeping, accountancy and business planning advice. We also offer free comprehensive insurance.

Try our tax calculator, Contracalc, to see how much you could be taking home as a self-employed worker.

You can also call Foremans for a free initial consultation on 01244 625 500.







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