What will the gig economy do to retirement income?

Report raises concern about pension savings for the self-employed

Written in line with our editorial policy.

More than half of the UK’s ‘gig economy’ workers are unable to afford saving into a pension, according to new research from PensionBee. This fuels concerns about their future retirement finances, and the potential need for alternative retirement income sources.

The study found that 57% of self-employed, freelance and gig economy workers who are not currently contributing to a pension said they simply could not afford to. 

Beyond cost, many gig workers face confusion about how to get started with pensions. Nearly a third (29%) of respondents said they find pensions too complicated or don’t know where to begin.

More than a third (35%) of respondents said they had felt excluded or unsupported by the pension system at some point during their careers, often due to the nature of their non-traditional work. 

The report highlighted a potential disconnect between the current pension framework and the reality of modern, flexible employment.

A “systemic failure” in the pension system 

Lisa Picardo, chief business officer at PensionBee, said: “Too many people working hard outside traditional employment structures are being left behind by the current pension system and are facing the very real risk of a poor retirement outcome with heavy reliance on the state pension.

“When more than half of gig workers say they simply can’t afford to save for retirement, this stops being a personal finance issue and becomes a systemic failure.”

Will property wealth play an even bigger role in retirement income?

As the UK’s workforce continues to diversify, the retirement savings system may need to evolve in tandem. Until then, more people may instead turn to the wealth stored in their homes to help fund a secure and comfortable retirement.

This year alone, we have reported several times on the role that property wealth plays in retirement income and potential future trends, including:

• Over-55s hold majority of UK property wealth
• Later life lending surges as over-55s turn to property wealth
• 1-in-4 homeowners may use equity release to fund retirement

Equity release is one way that homeowners aged 55 or over can unlock tax-free cash from the value of their home. For those with limited pension prospects, this could be a way to provide a vital financial cushion in retirement.

Unlocking the wealth in your home

While equity release is not the right solution for everyone, it could be a helpful option for homeowners who have few other assets or savings beyond their home. 

With a lifetime mortgage, the most popular type of equity release, you access tax-free cash through a loan secured against your home, with no need to make regular repayments. The loan and interest are usually repaid through the sale of the property when you pass away or move into long-term care.

To learn more about how it works and whether it could be right for you, get in touch today for a personalised, no-obligation quote at the latest equity release interest rates.

Just call us on 0800 096 2215 or request a call back and we’ll arrange a no-obligation appointment with one of our selected equity release advisers for you. Or to get a quick estimate of how much you could unlock from your home, why use our free online equity release calculator.

Source

PensionBee research: Over half of gig workers unable to afford to save into a pension. Pensions Age. Accessed 24/06/2025.