Latest news with #selfemployed
Yahoo
a day ago
- Business
- Yahoo
Why thousands of women are missing out on full state pensions
Last week's announcement of the new pension commission was accompanied by a deluge of papers and research. These highlighted key groups who are being left behind by the current pension system – among them were the self-employed, younger people and women. The gender pension gap is an enormous issue – according to the research it stands at 48%. The most recent data (2020 to 2022) estimates that the average pension wealth of those aged 55 to 59 was £81,000 for women compared to £156,000 for men. So why is this? Auto-enrolment has played an important role in getting more women saving into a pension, but major challenges remain. Women are more likely to take career breaks due to having children or looking after loved ones. If they return to the workplace, it is often on lower wages or in part time work and their prospects for career development are hampered. Read more: How to make pension pots tax-efficient This mix of circumstances conspires to make sure women save less into their pension and get less out of it. Added to this, many women working part time do not earn enough to hit the auto-enrolment trigger so miss out on a workplace pension. It's a fault not of women's making and needs reform, such as increased access to flexible working and good quality affordable childcare to help women return to the workforce and build their financial resilience. There are a couple of top tips to be aware of that might prove useful though. Workplace pension contributions Wherever possible try and maintain your workplace pension contributions when you go on maternity leave. If you qualify for statutory maternity pay, your employer needs to maintain their pension contributions if you are still in the scheme. This means that even though your contributions will dip as pay reduces, your employer needs to maintain theirs at the same level. Contributions from your spouse If you aren't working, it might be worth seeing if your spouse or partner can contribute to a pension on your behalf. Read more: How to get the best currency exchange deal for your holiday money You can currently contribute up to £2,880 per year to the pension of a non-working spouse and they will receive a tax relief top up from the government bringing it to £3,600. State pension Make sure you claim child benefit in your name as it comes with a national insurance credit that goes towards your state pension. Many women miss out on this either because their partner has claimed the benefit in their name, or because families opted out of receiving child benefit after the introduction of the high-income child benefit tax charge. Under this charge you receive child benefit but if you earn more than £60,000 the government starts to claw it back through a charge you need to pay through self-assessment. By the time you hit an annual income of £80,000 per year you effectively have to repay the whole of your child benefit. This led to many people opting out because of the admin hassle without realising the impact on their state pension. Now you have the option of ticking a box that says you don't want to receive the child benefit, but you do want the national insurance credit. Read more: Three key issues for the Pension Commission How your health can affect your pension How much money do you need to retire?\擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
3 days ago
- Business
- Yahoo
Why I'm not paying into a pension
Almost half of working-age adults are not paying into a private or workplace pension, the government revealed this week. The self-employed, low earners and women are less likely to have their own pension - while only one-in-four people of Pakistani or Bangladeshi background have one. The BBC spoke to some of those who do not have a workplace or private pension to find out why. "I am more worried about surviving day-to-day than worrying about the future," says 29-year-old Mohaimon. Originally from Bangladesh and now living in London, he gets work in the hospitality sector as and when jobs come up. He worked in retail during university and was auto-enrolled in a pension scheme -but when he realised he couldn't use the money until he retired, he stopped it. "The whole dream of having a good job and paying in to a pension doesn't feel like it applies to me," he says. "A lot of my financial decisions are survival based - that's my reality." He adds: "Even if I do get a good job with good pension benefits, I'd rather save for a deposit for a house. I'll try to get £30k - £50k in my bank account. I think that's more important than anything else." 'I need to cover my daily expenses first' Saira Amir, 46, is a self-employed stylist working in Norfolk. She says if she could afford to save for a pension she would - but she struggles to cover her daily expenses. She has three children aged 21, 20 and 11 who all live at home with her. "Being self-employed in this job is risky," she says. She would like to open her own salon, but says it's a huge cost she can't afford yet. The single mother gets universal credit - a benefit payment for working age people. But she says it covers groceries and £5 a day bus fares to get to clients and "isn't enough" to save for a pension too. Saira adds that in previous generations of her Pakistani family, parents would have relied on children to look after them in their retirement, but that with her children, "I don't know their mindset" so she isn't expecting the same. State pension Those without a private or workplace pension may have to rely on the state pension. In general, you need 35 years of qualifying National Insurance contributions to get a full state pension. This is £230.25 per week, which equates to £11,973 per year in the 2025/26 tax year. But the annual income needed for a minimum retirement living standard was £13,400 a year for one person and £21,600 for two, the Pensions and Lifetime Savings Association estimates . For what it calls a "moderate" lifestyle, a single person would need £31,700 a year, while two people require £43,900. For a "comfortable" retirement, it's an annual income of £43,900 for one, and £60,600 for two. How much is the state pension worth and when will I get it? Auto-enrolment pension All employers must offer a workplace pension scheme to their staff, and automatically enrol those who fit certain criteria. They include people who earn at least £10,000 a year per job, and are aged between 22 and state pension age. But not those aged under 22 and the self-employed. Workers can opt out if they do not want to save. Otherwise, 5% of their earnings above £6,240 a year and a contribution from their employer worth 3% of earnings, is automatically saved into a pension pot. The idea is to encourage saving for retirement from an earlier age, to top up the state pension in later life. It has been widely regarded a success since its phased introduction in 2012, with relatively few people opting out. Those paying into a workplace pension also get tax relief on what they pay in. "So, if you are a basic rate taxpayer who would have paid 20% income tax it means you get 20% tax relief on your pension contribution," says Helen Morrisey, head of retirement analysis at Hargreaves Lansdown. "This means that a £100 pension contribution would only cost you £80." She adds: "For a higher rate taxpayer who would have paid tax at 40% that £100 contribution would only cost them £60." 'I wish I'd started sooner' Victoria Olsena, 38, says she "barely knows anyone" who is saving for retirement. "People should realise that the future is going to be terrible and they should do something about it," she says. Originally from Argentina and now a British citizen after several years in the UK, Victoria owns her own AI marketing consultancy earning £50,000 a year. She pays in to a pension and an ISA and says she wishes she had started paying into a pension sooner. Helen at Hargreaves Lansdown says: "Retirement may feel like a long way away and that can mean you prioritise other things for your money. "But it is exactly this long-term drip feed of contributions going into your pension over time that really builds up its value. "Getting to grips with it early will really help you as it can be hard to make up lost ground later on." Additional reporting by Connie Bowker and Kevin Peachey. Future pensioners to be worse off, government warns What is the triple lock and how much is the state pension worth? Solve the daily Crossword
BBC News
3 days ago
- Business
- BBC News
Pensions: 'Why I'm one of millions of UK adults not paying in'
Almost half of working-age adults are not paying into a private or workplace pension, the government revealed this self-employed, low earners and women are less likely to have their own pension - while only one-in-four people of Pakistani or Bangladeshi background have BBC spoke to some of those who do not have a workplace or private pension to find out why."I am more worried about surviving day-to-day than worrying about the future," says 29-year-old Mohaimon. Originally from Bangladesh and now living in London, he gets work in the hospitality sector as and when jobs come worked in retail during university and was auto-enrolled in a pension scheme -but when he realised he couldn't use the money until he retired, he stopped it."The whole dream of having a good job and paying in to a pension doesn't feel like it applies to me," he says. "A lot of my financial decisions are survival based - that's my reality."He adds: "Even if I do get a good job with good pension benefits, I'd rather save for a deposit for a house. I'll try to get £30k - £50k in my bank account. I think that's more important than anything else." 'I need to cover my daily expenses first' Saira Amir, 46, is a self-employed stylist working in Norfolk. She says if she could afford to save for a pension she would - but she struggles to cover her daily has three children aged 21, 20 and 11 who all live at home with her."Being self-employed in this job is risky," she says. She would like to open her own salon, but says it's a huge cost she can't afford single mother gets universal credit - a benefit payment for working age she says it covers groceries and £5 a day bus fares to get to clients and "isn't enough" to save for a pension adds that in previous generations of her Pakistani family, parents would have relied on children to look after them in their retirement, but that with her children, "I don't know their mindset" so she isn't expecting the same. State pension Those without a private or workplace pension may have to rely on the state general, you need 35 years of qualifying National Insurance contributions to get a full state is £230.25 per week, which equates to £11,973 per year in the 2025/26 tax the annual income needed for a minimum retirement living standard was £13,400 a year for one person and £21,600 for two, the Pensions and Lifetime Savings Association estimates .For what it calls a "moderate" lifestyle, a single person would need £31,700 a year, while two people require £43,900. For a "comfortable" retirement, it's an annual income of £43,900 for one, and £60,600 for much is the state pension worth and when will I get it? Auto-enrolment pension All employers must offer a workplace pension scheme to their staff, and automatically enrol those who fit certain include people who earn at least £10,000 a year per job, and are aged between 22 and state pension age. But not those aged under 22 and the can opt out if they do not want to save. Otherwise, 5% of their earnings above £6,240 a year and a contribution from their employer worth 3% of earnings, is automatically saved into a pension idea is to encourage saving for retirement from an earlier age, to top up the state pension in later life. It has been widely regarded a success since its phased introduction in 2012, with relatively few people opting paying into a workplace pension also get tax relief on what they pay in."So, if you are a basic rate taxpayer who would have paid 20% income tax it means you get 20% tax relief on your pension contribution," says Helen Morrisey, head of retirement analysis at Hargreaves Lansdown."This means that a £100 pension contribution would only cost you £80."She adds: "For a higher rate taxpayer who would have paid tax at 40% that £100 contribution would only cost them £60." 'I wish I'd started sooner' Victoria Olsena, 38, says she "barely knows anyone" who is saving for retirement."People should realise that the future is going to be terrible and they should do something about it," she from Argentina and now a British citizen after several years in the UK, Victoria owns her own AI marketing consultancy earning £50,000 a year. She pays in to a pension and an ISA and says she wishes she had started paying into a pension at Hargreaves Lansdown says: "Retirement may feel like a long way away and that can mean you prioritise other things for your money."But it is exactly this long-term drip feed of contributions going into your pension over time that really builds up its value. "Getting to grips with it early will really help you as it can be hard to make up lost ground later on."Additional reporting by Connie Bowker and Kevin Peachey.
Forbes
5 days ago
- Business
- Forbes
2026 Open Enrollment Guide For Self-Employed Workers: New ACA Rules And HSA Changes
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. For millions of self-employed Americans, the Affordable Care Act's (ACA) open enrollment period is one of the most important financial decisions of the year. This time around, a handful of upcoming changes could affect how much you pay—and how much you save. In most states, open enrollment for 2026 health insurance starts November 1, 2025, and runs through January 15, 2026. If you're self-employed, a gig worker or run a small business, this is your window to shop around and choose a plan through or your state's marketplace. Thanks to the One Big Beautiful Bill Act, the definition of a high-deductible health plan will change in 2026. As a result, more ACA marketplace plans will qualify for health savings account (HSA) contributions—a big win if you're self-employed and trying to save on taxes while planning for medical costs. In plain terms, more people will be able to set aside pretax money for healthcare. For freelancers and solo business owners, that's a simple way to reduce taxes and build a buffer for future health expenses. There's more good news: The expanded premium tax credits from the American Rescue Plan are still in effect. That's a major benefit if your income isn't always predictable. According to the Centers for Medicare & Medicaid Services (CMS), four out of five people with ACA coverage can pay less than $10 monthly for their plan. Since freelancers don't have the cushion of employer-backed plans, knowing your cost ceiling is fixed is a relief, especially if you use health services like therapy or prescription refills often. The CMS has set the 2026 out-of-pocket cap at $10,600 for individuals, a modest increase from last year. That cap gives you a clearer upper limit on what you could owe in a worst-case medical year. Plans may even set lower limits within that federal threshold, giving you some breathing room if your income dips or healthcare expenses spike unexpectedly. For the self-employed, accurately projecting income is imperative. Your estimated income for 2026 determines how much of a subsidy you'll receive. If you underestimate it, you could owe money back at tax time. Overestimate it, and you might miss out on savings. However, the Marketplace lets you update your income throughout the year if your financial situation changes. This open enrollment period also brings ongoing improvements to plan transparency, including better tools for comparing premiums, deductibles and provider networks, making it easier to shop smart. Doing your homework is essential for freelancers and gig workers without employer-provided insurance. With so many options and no human resources department to guide you, it's necessary to compare plans carefully, look at total costs (not just premiums) and confirm your doctors and prescriptions are covered. These steps will help you avoid an unexpected and expensive bill after a routine visit. Need help finding a solid plan? Forbes Advisor's picks for the best affordable health insurance companies are a great place to start. Open enrollment is your once-a-year chance to get health coverage or switch to a better plan. And with the 2026 changes, self-employed workers have more financial tools than ever to build affordable, tax-smart coverage. With expanded HSA access, continued tax credits and improved plan comparison tools, this year's open enrollment offers a chance to rethink your healthcare setup. Review your options, estimate your income accurately and choose a plan that fits your needs. Doing so can save you money all year—and help you avoid surprise medical bills down the line.
The Guardian
7 days ago
- Business
- The Guardian
Taking pride in a life well spent as a sparkie
Thank you, Adrian Chiles. You genuinely made me feel proud, reading your words (Kids, don't look to me for career inspiration. Look to your electrician instead, 16 July). For 47 years I've been honing my skills as an electrician, the vast majority of that time on a self-employed basis, with the added pressure that can impose. Work security is a real worry, especially during recession periods. So is chasing payments, the endless paperwork and the added burden and expense of Part P building regulations, which are constantly evolving with updates, new books to buy and exams to sit, plus one day a year spent with an assessor scrutinising your work. The body takes a battering, which becomes obvious as you approach retirement, and the goalposts on that look set to be moved yet again by those who have no idea what putting in a good shift means, with more years likely to be added to the state pension age. It's been great fun and absolutely fulfilling, though, learning how tools can simply and effortlessly be an extension of my hands. Thanks again for the recognition. Mark AbleyWing, Buckinghamshire Adrian Chiles should do a day of work experience with an electrician. If he has to chase out a cable run in a wall or scramble around a filthy, crowded loft swimming in glass fibre, he would find out what it really is like. I have a degree in chemical engineering; I left a career in that after four years to go into data processing and loved it, retraining on the go. Approaching 50, I had to retrain again, and I was a qualified sparkie for 15 years. It was bloody hard work, finishing the paperwork as late as 10pm. I did it because I had to. Some jobs were fun, but many were a grind. I'd happily have had a desk job on regular pay instead. Mike Joseph Chipperfield, Hertfordshire Have an opinion on anything you've read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
