A growing gap in pension savings among the self-employed could undermine wider efforts to tackle the UK’s retirement crisis, according to new research from Scottish Widows.

The study found that 39 percent of self-employed workers are not saving enough for retirement, while nearly one in four are not saving anything at all. Without intervention, experts warn that more than half of the UK’s self-employed could be on track for poverty in retirement.

Susan Hope, retirement expert at Scottish Widows, said the issue requires immediate attention. “Closing the self-employed pensions gap in the UK is critical to cracking the wider pensions crisis. More than half of self-employed individuals are on track for poverty in retirement, compared to just 25 percent of full-time workers,” she said.

Hope added that flexibility is key for business owners and freelancers, many of whom face fluctuating income and inconsistent work. “Our work with Nest allowed us to test models with flexibility built in,” she noted.

Lloyds Banking Group, which owns Scottish Widows, recently collaborated with Nest Insight to explore how "autosave" functionality could work for self-employed people. The concept was trialled with a small group and received positive initial feedback. Researchers said the findings support further exploration of integrating autosave tools into banking platforms and self-employment software.

Unlike traditional employees, self-employed workers do not benefit from automatic enrolment into workplace pensions. They also miss out on employer contributions and must take a more proactive approach to managing their long-term financial future.

Scottish Widows commissioned YouGov to survey more than 5,100 people across the UK earlier this year. The results underscored the scale of the problem and prompted a renewed call for awareness, education, and tools tailored to self-employment.

Hope offered the following tips for business owners looking to build a retirement fund:

1. Start small
   Irregular income can make consistent saving difficult, but small monthly contributions to a personal pension can build over time. Topping up at the end of the tax year, once finances are clearer, is one way to keep contributions flexible.

2. Consider a Lifetime ISA
   A Lifetime ISA can be used for retirement or to buy a first home and includes a Government bonus. However, withdrawal penalties apply if funds are taken out for other purposes.

3. Maximise tax relief
   Pension contributions made through self-invested personal pensions (sipps) and other personal pensions come with tax relief. This can significantly boost savings over time. Business owners may also benefit from professional financial advice tailored to their individual situation.