I work 60 hours a week and still can’t retire until 80 – I’m terrified over my lack of pension and feel like a failure
TYPING the words “private pension plans” into Google and hitting search, Jamie Bannerman is hit by a wave of anxiety and worry.
As the 46-year-old scrolls through the thousands of different companies offering “expert advice” and various pension plans, this feeling of dread worsens.
Not only does the self-employed teaching academy instructor have no idea which plan is best for him, he doesn’t even know where to start.
Feeling overwhelmed, he shuts his laptop and makes the same vow he’s made a dozen times before: he will sort it out another day.
“Every time I sit down to look at options, the words on the computer screen blur,” he said.
“I don’t understand the various schemes and plans available, and looking just ends up causing anxiety attacks and leaves me with a sense of dread. I can’t shift for days.”
Jamie is living with so-called “private pension panic”, which he describes as both debilitating and soul-destroying.
“I find myself paralysed with fear about deciding what sort of private pension I need, while also feeling desperately worried I have left it too late,” he said.
“At 46 and as a married dad of two, I haven’t started a private pension, have no retirement plan and will likely work until I am eighty years old. I feel like a failure.”
But Jamie, who lives in Chessington with his wife, 41-year-old teacher Natalie, and children Issy and Henry, aged four and two, isn’t alone.
He is just one of the 4.33million self-employed workers currently earning a living in Britain in 2024 who may now be panicking about their retirement savings.
According to Census 2021 data, just 20% of self-employed people were paying into a pension between April 2018 and March 2020, compared with 80% of employees.
That means a staggering 3.4million self-employed people in Britain are without a private pension at all, meaning they are relying on state pension or an upturn in the economy to bolster their retirement coffers.
It comes as the Association of Independent Professionals and the Self Employed (IPSE) recently revealed around 67% – or two in every three – self-employed people are “seriously concerned” about their retirement savings – equivalent to more than 2.9million people.
According to the Department for Work and Pension, 53% of people without a private pension say they cannot afford to make contributions.
The figures from the IPSE also revealed almost one in five people had not started saving for retirement at all.
As a result, more Baby Boomers are retiring later or returning to work because their pension plans and retirement funds have been crippled by the cost-of-living crisis, figures show.
A 2021 report by Retirement Villages Group revealed 900,000 Brits aged over 70 are heading back to work or staying longer in part- or full-time work since the pandemic and cost of living crisis began.
And the Office of National Statistics recently revealed there are now more people aged 50 or older in work or looking for work than before the pandemic hit.
“I don’t find the figures shocking, I find them terrifying,” Jamie said.
“More and more people are going self-employed, but then those people simply don’t have enough money to set up a private pension.
“My generation is facing a retirement crisis and it’s self-employed people like me who are going to be the hardest hit,” he added.
“We are a generation of forty to fifty something’s living with private pension panic. We are in crisis.”
The dad of two set up his own private teaching academy last year. It earns him an income of £25,000 a year, which he hopes will increase with time.
“However, I still have £4,000 on credit cards and loans which I used to start the business, and paying them off has to be a priority over retirement planning,” he said.
My private pension panic wakes me up in the middle of the night – I feel sick to my stomach and paralysed with fear.”
Jamie Bannerman
Jamie and his wife own a two-bedroom end-terrace house, which they bought in 2021 for £335,000.
The couple pay £1,000 for their mortgage every month and expect that to almost double to £2,000 when the initial fixed interest rate ends in two years’ time.
“By the time we pay for our mortgage, gas and electric, council tax, groceries and kids’ clothes, as well as our car costs, we have very little left in the kitty,” he said.
“Like many self-employed people, I turned around and suddenly I was 46, realising I hadn’t sorted a private pension because I’ve been focused on just paying the bills.”
Jamie sought advice two years ago about a private pension, but says he was told he’d have to pay in £500 a month to ensure he had enough to retire on.
“I was shocked as £500 seemed so much, I can’t afford that,” he said.
“I was also confused about how much money the adviser would get and how the plans work.
“When the pandemic hit, Natalie and I focused on buying a property and just paying the bills. Now, my private pension panic wakes me up in the middle of the night – I feel sick to my stomach and paralysed with fear.”
Basic pension plans for self-employed people
There’s a range of simple personal pensions on offer from a growing number of digital providers.
Online pension providers like PensionBee and Penfold, for example, are designed for the self-employed and let you consolidate your old pensions into a single plan if you wish.
Other investment providers offering personal pensions include Nutmeg and Wealthify.
If you are looking for greater investment choice through a Self Invested Personal Pension (Sipp), the investment platforms AJ Bell, Hargreaves Lansdown and Interactive investor enable you to choose from thousands of funds and other investment options.
But bear in mind that moving old pensions into your current plan may not be the right move, though, and if you are unsure, seek professional financial advice
Jamie had planned to take on part-time work as an actor, model and party entertainer to earn extra cash to fund a pension.
“That’s a side hustle I could do to pay into a private plan if I knew the one to use. But with the cost of living, that money is being eaten up just on bills.”
He now feels he is working sixty hours a week running his teaching academy but is not making any headway.
“I know many of my friends who are also self-employed are in the same boat.
“We know the state pension will be worthless when we retire and finding a simple basic private pension that we can afford is almost impossible.”
Jamie says he just wants a basic plan that he can start using to help build a sense of momentum.
“If nothing changes I will have to keep working until I am 80 while relying on the equity I have in my house and the basic state pension. I know that’s not enough,” he said.
“I am prepared whatever hours I have to fund a private pension, but I need reliable advice.
“I also think the Government should offer more incentives to encourage self employed people to set up private pensions – I just want help and advice so I don’t feel I’m letting my family down.”
Which personal pension plan works best for you?
You could choose a personal pension that offers a range of ready-made plans to suit different types of savers.
If you pay into a stakeholder pension, your contributions will usually be paid into a default fund.
A Sipp typically gives you greater investment choice, including individual shares and investment trusts, for example.
It is up to you to choose the investments you want to hold, and this type of pension is usually more suitable for people who are comfortable making their own investment decisions.
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