Self Employed to Benefit from Pension Shake Up

Self employed people could be amongst the winners of the government’s new single tier pension.

The white paper details plans to change the current £107.45 basic pension with various tops up, to a flat rate of £144 from 2017 at the earliest.

The single tier pension is to replace a “complex” system which involves add-ons and means testing.

Current rules involving national insurance contributions mean that self employed people often find it hard to earn the state full pension. The simplification of the rules is set to change that.

Pensions Minister Steve Webb said: “The current state pension system leaves millions of people needing means-tested top-ups. We can do better. Our simple, single tier pension will provide a decent, solid foundation for new pensioners in an otherwise less certain world, ensuring it pays to save.”

However, other people will not gain from the changes, with the majority set to receive lesser pensions in the future.

1 reply
  1. ERGO
    ERGO says:

    Seems like a pretty good evolution there.

    For regular working people In Belgium we have 4 pillars of pension savings.
    1st is the state pension itself (1.100€ approx).
    2nd pillar is your own pension savings which are with a bank in a fund.
    3rd pillar is through your employer, and
    4th pillar is the risky investment in pension funds.

    But self-employed people have the lowest pensions. It’s even below the European threshold for poverty. That’s why it’s a given that your have several (multiple!) plans running in the background for later. And even then, the ROI is not guaranteed.

    Harsh times…

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