Less than half of self-employed women save the minimum recommended level for retirement. The number of female entrepreneurs in the UK has hit an all-time high at 1.7 million and since 2005, 700,000 women have set up on their own. It is clear to see a growing number of women are taking charge of their careers by launching their own businesses or working as freelancers which potentially can make it a stuggle to ensure they are saving enough for their future.
Business earnings of female entrepreneurs see wide variation, which may explain the polarisation in savings. Four out of five self-employed women (80%) who save inadequately are those who earn below £20,000 a year.
56% of women who are employed by a company- making the 46% who are saving at least the minimum adequate level are amongst the best savers in the country. Their average savings rate of 16% of income is higher than that of self-employed men (14%) and is even higher than the average for both employed men and women (12% and 10%).
Anna Lane, founder and CEO of The Wisdom Council, a majority female-owned and run business operating in financial services, added: “Ambition is a major theme that shines through from the women I work with and this is reflected in the increasing number of female entrepreneurs. There is a disconnect however with their aspirations and how it will be realised financially, with few having even considered anything other than personal savings to start their own business.“30% of businesses fail in the first two years and so this risk paired with the risk of not putting money aside for the future is a double-edged sword often faced by female entrepreneurs. In fact, many women I talk to see their business as their retirement fund.“We need to see more flexibility and innovation in long-term savings propositions that acknowledge the different earning patterns of the self-employed. We must recognise that this group is often more focused on annual tax returns as a point when income is known for the year and be open to reviewing other tax incentives to encourage saving.”
Do we need educating on the matter when setting up on our own to help us in the long term? Is this something every self employed women and entrepreneur should explore from the outset? The good news is that when self-employed women do save adequately, they actually put more of their income aside than anyone else.
Share this article: