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Self-employed workers are missing out on up to £91,512 over their working lives because they do not receive employer contributions through a company pension scheme, according to new analysis* from Prudential.

UK workers earn £26,664 a year on average. Those who are members of a company pension scheme** receive average employer contributions of £2,232 a year (8.4 per cent of annual salary) and contribute £945 themselves (3.5 per cent), making a total of £3,177 (11.9 per cent) annually in pension contributions.

Over the course of an average working life***, the average employer contributions alone add up to £91,512 and self-employed workers, who can't join a company pension scheme, will miss out on this substantial contribution towards their retirement funding.

Analysis from Prudential also reveals that the level of employer pension contributions can differ significantly by industry. Public administration and defence employers contribute the highest proportion of annual salary at 15.2 per cent, equivalent to £4,439 per year. However, finance and insurance sector workers receive bigger monetary contributions from their employers, averaging £6,067 a year (11.7 per cent of annual salary), on account of their typically higher salaries.

Separate research by Prudential**** among self-employed workers, conducted last year, found that almost half (46 per cent) make no self-employed pension contributions at all to support them in retirement. While some respondents said they planned to draw upon other sources of income when they stopped working, almost a third (29 per cent) of business owners expected to have to rely entirely on the State Pension for their income in retirement.

Stan Russell, retirement expert at Prudential, said: "Self-employed workers have to be even more proactive when it comes to saving for retirement, as they can't benefit from employer contributions in a company pension scheme. Saving into a pension gives valuable tax relief, while professional financial advice can be helpful in ensuring that they’re saving enough for a comfortable retirement.

"We know from our research that a significant proportion of self-employed workers have no private pension and will rely solely on the State Pension in retirement. Often this is because they have prioritised the needs of their business over saving into a pension. However, the State Pension alone is not enough for a good standard of living in retirement, which is why saving as much as possible into a pension from an early stage is crucial."

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Notes to editors:
The information contained in Prudential UK's press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk.

*All data based on the provisional 2012 ASHE report, published by the ONS in November 2012.
**Analysis excludes employer contributions to defined benefit (‘final salary’) pension schemes, as very few workers can still access these schemes.
***Calculations based on 41 years of employer pension contributions.
****Conducted in October 2012 among 448 self-employed UK adults working more than 30 hours a week.

About Prudential:
"Prudential" is a trading name of The Prudential Assurance Company Limited, Prudential Unit Trusts Limited and Prudential Distribution Limited. This name is also used by other companies within the Prudential Group which, between them, provide a range of financial services that incorporate retirement planning, investment planning, life assurance, pensions and savings.

PR Contact:
Ben Davies
3 Sheldon Square
London
W2 6PR
020 7004 8082
www.pru.co.uk

This press release was distributed by ResponseSource Press Release Wire on behalf of pr-sending-enterprises in the following categories: Personal Finance, for more information visit https://pressreleasewire.responsesource.com/about.