Nest Insight is collaborating on two research pilots with Penfold and Moneyhub to test new forms of flexible saving aimed at the self-employed, with their by nature often variable incomes.

The government committed to researching ways to improve pension saving among the circa 4.3m self-employed after a review of auto-enrolment in 2017. It is estimated that just 16% of self-employed people are actively saving into a workplace or personal pension, compared with 88% of employees eligible for auto-enrolment.

The research trials with the fintech firms are supported by the Department for Work and Pensions as part of a multi-year programme of work testing ways to help self-employed people save for retirement.

Pensions minister Guy Opperman said it was important that the self-employed are not left behind. "Pilots such as these are vital in understanding how to better help self-employed people achieve the retirement they want. We have worked with Nest Insight to ensure a variety of flexible saving options are tested and I look forward to reviewing the outcomes," he said.

Nest said its previous research identified that control and flexibility to changing circumstances were important factors for self-employed people when it comes to saving, and the pilots will therefore test different forms of flexible savings solutions and ‘nudges’. 

The solutions being trialled include:

The outcomes of the pilots will be analysed and publicly shared next year. 

Nest Insight's director of research and innovation, Jo Phillips, said the solutions will be designed to be scalable, adding: "It’s not that self-employed people aren’t interested – there’s a real appetite for saving for the longer-term. But self-employed people have told us that it can be difficult to find ways to save that fit with their lives and context – they often have limited time and headspace combined with variable income and future uncertainty."

The Pensions and Lifetime Savings Association said if the trial is successful, it has the potential to transform pension provision for the self-employed.

“This cohort of people, which includes everyone from consultants and freelancers to delivery drivers, farmers and tradespeople, do not currently fall within the scope of automatic enrolment and only a minority are saving into a private pension by themselves," noted Nigel Peaple, director of policy and advocacy.

“Every little effort to encourage pension participation among the self-employed is an effort worth making as many recognise they need to take action to sort out their pension but put it off or don’t know where to start," he added.