Urgent plea issued to Andy Burnham as millions of workers risk £70k pension losses
Pension experts have issued an urgent appeal to Andy Burnham ahead of the Autumn Budget, warning that millions of self-employed workers could reach retirement with significantly smaller savings because they are not automatically enrolled in workplace pension schemes.
The call for reform comes as the Government prepares for the Budget on October 28, when pension policy and the long-term financial security of workers are expected to remain under scrutiny. PensionBee, the retirement savings platform, wants ministers to extend pension auto-enrolment principles to self-employed people, helping them build retirement savings without relying entirely on their own initiative.
The organisation estimates that a self-employed person earning £25,000 could miss out on around £70,000 in retirement savings over a 30-year career if they fail to contribute to a pension. The figure highlights the potential long-term cost of leaving retirement planning entirely to individuals who may already face fluctuating earnings, rising household expenses and uncertainty over their future income.
Unlike most eligible employees, who are automatically enrolled into workplace pension schemes and can benefit from employer contributions, self-employed people must generally take the initiative to arrange their own private pension. They must decide how much to save, select a suitable product and maintain contributions while managing the everyday costs of running a business.
For many, that process can be difficult to prioritise. Income may vary considerably from month to month, while essential spending on housing, food, transport, equipment and business costs can leave little room for long-term saving.
PensionBee argues that this difference creates a structural disadvantage for people who work for themselves. Its proposed changes would encourage self-employed workers to consider pension contributions through the Self Assessment tax return system, making retirement saving a more visible part of the annual tax-filing process.
The proposal would not necessarily mean forcing every self-employed person to make the same contribution regardless of their financial circumstances. Instead, the central idea is to introduce a more systematic process that prompts individuals to make an informed decision about saving for retirement.
Pension gap raises concerns over retirement security
Figures cited by the Institute for Fiscal Studies in May 2026 underline the scale of the challenge. According to the research referenced in the report, only around 20% of self-employed workers earning more than £10,000 contribute to a private pension, compared with more than 80% of employees.
The difference is striking because self-employment accounts for a substantial part of the UK labour market. Freelancers, contractors, tradespeople, consultants and small business owners may all need to finance their own retirement without access to the arrangements routinely offered by employers.
The Government’s Pensions Commission interim report also highlighted the problem. It stated that just 4% of the 2.4 million people who rely solely on self-employment income were saving into a pension.
Although these figures relate to different groups and measures, both point towards a serious gap in retirement provision. A large proportion of self-employed workers may be approaching later life without the private pension savings that could supplement their State Pension.
Lisa Picardo, chief business officer UK at PensionBee, said the problem should not be interpreted simply as evidence that self-employed people are unwilling to save.
She described the barriers as a “structural disadvantage”, rather than a “lack of willingness to save, or a lack of desire for a good retirement outcome”.
Picardo argued that research repeatedly suggests self-employed workers are more engaged with pensions than commonly assumed, while public support for reform extends across different income groups and age ranges.
Her argument is that the existing system places too much responsibility on individuals to overcome administrative and behavioural obstacles that employees do not face in the same way.
For an employee, pension contributions can be deducted automatically from salary, with the employer also making contributions where applicable. For a self-employed worker, saving often requires a separate decision and a deliberate transfer of money that might otherwise be needed for immediate expenses.
That difference can have consequences over decades. Missing contributions early in a career means not only losing the money that could have been saved, but also potentially missing investment growth on those contributions.
However, the £70,000 figure should be understood as an estimate rather than a guaranteed loss for every self-employed worker. The eventual difference would depend on earnings, contribution levels, investment performance, charges, tax treatment and the assumptions used in the calculation.
John Healey will present his first Budget on October 28 (Image: Getty)
Nevertheless, pension campaigners say the underlying concern is clear: leaving retirement saving entirely to individual initiative can result in large numbers of people building inadequate pension pots.
Self Assessment tax returns could become key to reform
The Institute for Fiscal Studies has also called for a change in approach. In May 2026, the organisation proposed that self-employed people should be required to make an active choice about pension contributions when submitting their Self Assessment tax return.
Such a system could create a natural opportunity to encourage people to think about their financial future while they are already reviewing their earnings and tax liabilities.
Rather than expecting workers to discover pension products independently, the process could present information about available options and ask whether they wish to contribute. The precise mechanism, including whether contributions would be voluntary or subject to new requirements, would need to be decided by the Government.
The idea is not without challenges. Self-employed people have very different financial circumstances, ranging from high-earning professionals to workers whose incomes barely cover essential costs. A rigid contribution requirement could place additional pressure on those already struggling with irregular cash flow.
Any reform would therefore need safeguards for people on low incomes, those experiencing temporary financial difficulties and individuals approaching retirement with limited capacity to build substantial savings.
There are also practical questions about how contributions would be calculated, whether the system would accommodate fluctuating earnings and how workers could adjust payments when business conditions deteriorate.
Research published by the IFS in June 2026 found that more than three-quarters of employees who had consistently saved into pensions stopped doing so after moving into self-employment. The finding suggests that the transition between employment types can create a significant break in retirement saving, even among people who previously demonstrated a commitment to pensions. <Cite refs={[“turn186565search3″,”turn186565search4”]}/>
For pension campaigners, that is evidence that the problem cannot be solved simply by telling individuals to take greater responsibility. The system itself may need to make saving easier to maintain when people’s working arrangements change.
Will the Autumn Budget deliver a breakthrough?
The October 28 Budget provides a major opportunity for the Government to address concerns about retirement provision, but an immediate announcement of a new self-employed auto-enrolment scheme should not be assumed.
The Government-backed Pensions Commission published its interim report in May, identifying the self-employed as one of the groups most at risk of inadequate retirement income. Its final recommendations are expected in early 2027, after which ministers have said they will set out their response and plans for reform. <Cite refs={[“turn186565search5″,”turn186565search10″,”turn186565search12”]}/>
That timetable means the Budget could become a platform for outlining priorities or addressing wider pension questions, but the detailed framework for self-employed retirement saving may come later.
PensionBee’s appeal is therefore aimed at keeping the issue firmly on the political agenda as ministers consider their next steps.
The wider challenge is substantial. The interim Pensions Commission report warned that around 15 million working-age people in the UK were not saving enough for retirement. It also highlighted the particular difficulties facing lower and middle earners, self-employed workers and people who are unlikely to own their homes in later life. <Cite refs={[“turn186565search5″,”turn186565search7”]}/>
For those groups, an inadequate pension can have consequences beyond the size of a bank balance. It may affect their ability to pay housing costs, maintain independence, meet unexpected bills and enjoy a reasonable standard of living after leaving work.
The State Pension remains an important foundation for retirement income, but private savings can provide additional flexibility and protection against expenses that rise over time. Workers who have spent decades outside a workplace pension system may have fewer resources available to bridge the gap.
Political pressure grows over fairness for self-employed workers
For Andy Burnham and the wider Labour Government, the debate presents a question of fairness as well as economics.
Self-employed people contribute to the economy through their work, businesses and services, yet many lack the pension arrangements that help employees accumulate savings automatically. Supporters of reform argue that the retirement system must adapt to a labour market in which more people work independently, move between contracts or combine several sources of income.
However, ministers will also need to consider the costs and administrative consequences of any new scheme. Employer contributions cannot simply be replicated for every self-employed person because there is no single employer responsible for making payments on their behalf. A workable system must account for that difference while encouraging consistent saving.
The Government must also balance immediate financial pressures against the long-term benefits of pension contributions. Workers facing high living costs may be reluctant to lock away money they could need in the short term, particularly when their income is unpredictable.
That is why the details of any reform will matter as much as the headline announcement. A successful policy would need to be accessible, flexible and understandable, while ensuring that people are not pushed into unaffordable commitments.
For now, the £70,000 warning serves as a stark illustration of what can happen when retirement saving is postponed or overlooked over a working lifetime. It is not a guaranteed loss for every self-employed person, but it highlights the potential cost of a system in which millions do not receive the same automatic prompts and employer support as traditional employees.
With the Autumn Budget approaching and the Pensions Commission preparing its final recommendations, pressure is building on ministers to explain how they intend to close the gap.
The central question is whether the Government will move towards a system that makes pension saving a routine part of self-employment, rather than an additional task that workers must organise themselves.
For millions of people planning their future outside traditional employment, the answer could make a substantial difference to the financial security they enjoy when their working lives eventually come to an end.