New research has indicated that around 27 percent of self-employed choose to invest in their business rather than place money into retirement fund.
The news comes as business owners are increasingly viewing the immediate success of their companies as a priority over their long term retirement plans.
The research, conducted by Prudential also revealed that almost 20 percent of individuals questioned actively choose to invest in their businesses, viewing the company itself as an alternative to a pension scheme.
As the government rolls out its auto-enrolment pension plan, the information sheds light upon those who are not involved, such as the self-employed, and how they are seeking alternative retirement plans.
Stan Russell, a retirement expert at Prudential said:
"It's easy to see why many self-employed workers prioritise investing in their businesses over saving into pensions when times are tough. The pay-off is much more immediate and the consequences of not saving for retirement can often feel quite distant”
The research also revealed that 40 percent of self-employed believe that they will never retire. Although for some this approach may pay off, as a longer working life can provide more opportunities to invest.
Russell also highlighted the dangers of working into old age:
"In many cases, working beyond the normal age of retirement is an excellent way of securing additional income and boosting retirement savings. As people get older, however, their health often declines along with their ability to keep working. Retirement could therefore become a necessity, as opposed to a lifestyle choice.”