Less than 1 in 10 (9%) self-employed workers paid into a personal pension in the 2023/24 tax year, according to data from HMRC.
Just 360,200 of four million self-employed individuals in the UK made any contributions to a pension during the tax year, with 90,100 of these paying sums of less than £1,000 into their pots.
The average pension contribution of self-employed workers who were paying into a pension was £7,700.
At the other end of the scale, the top 25 highest contributing self-employed workers paid an average of £304,400 in to their pension in 2023/24.
HMRC’s figures are for gross contributions, including the basic rate of tax relief. They were accessed by money app Plum via a Freedom of Information request.
They follow a new report from the Pensions Commission earlier this week, which shared concerns about low pension savings levels amongst the self-employed.
The report also highlighted that contribution levels are not high enough, criticism of the pension freedoms reforms, and concerns about the variation in returns achieved by different pension providers.
Steve Webb, partner at LCP, said: “This is a strong signal of higher contribution rates in the 2030s, possibly on a wider band of earnings. The report is particularly concerned about the decumulation phase where it is concerned about people accessing pensions early and in full, or maxing out on tax free cash.
“Although pension freedoms will not be fully reversed, we can expect to see tighter rules, with a mix of later access to pensions and strong defaults steering people towards regular income rather than lump sum withdrawals.
“Overall, the report clearly paves the way for higher contributions and tighter rules around decumulation.”