UK. Growth in self-employment risks undermining the state pension
The rising popularity of self-employment risks undermining the sustainability of Britain’s state pension as national insurance contributions fall, new research has found.
For every one million people moving from being employed to being self-employed, £2.8bn is lost annually from national insurance contributions, which fund the state pension, according to a report from pensions firm Aegon.
Under reforms to the pensions system in 2016, self-employed people now receive the same state pension as employees. However, the rules about national insurance contributions were not changed and self-employed workers pay slightly less than those employed by companies. This means that, as self-employment increases, the national insurance pot, which is currently around £96bn annually, shrinks.
Read More: Telegraph
