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Part 6 of Legal & General’s U.S. gig economy study finds 77% of gig workers would rely on personal savings to fund retirement
Study analyses savings and retirement shortfalls of freelancers.
5 Apr 2023
- 67% say not having access to retirement plans & other benefits is a key drawback to gig work
- 53% say gig work has a negative impact on their access to retirement and savings plans
- 45% of gig workers don’t expect to retire before 65; 30% never expect to retire
- 29% feel gig work has negatively affected their ability to save in case of an emergency
A sixth segment of a broad new study sponsored by Legal & General Group (LGEN, LGNNY), U.S. Gig Economy, Part 6: Gig Workers come up short on their future financial and retirement planning, was released today. It follows a Special Report for International Women’s Day, Tasked With Both Childcare and Earning, Women Fall Behind Their Male Counterparts, which looked into the gender pay gap, lowered retirement expectations, and other inequities experienced by female gig workers. This latest report looks into the financial challenges people working in the U.S. Gig Economy face as they contemplate a post-retirement life.
This sixth report in the data-rich study explores the challenges many gig workers face, from being unable to cover an unexpected $1,000 expense to lacking the ability to plan for retirement. The study found that more than half (53 percent) of the freelancers surveyed thought that gig work negatively impacted their access to savings and retirement plans, while 29 percent felt that choosing to work this way negatively affected their ability to save.
Though they have higher levels of financial literacy than the average American, independent workers find that retirement planning poses a particularly difficult challenge, according to Legal & General’s U.S. Gig Economy research. While the survey elicited a complex array of responses to a question about which financial security benefits they hold, more than three-quarters (77 percent) of those surveyed said their own personal savings will provide the largest contribution to their retirement income—while 30 percent of gig workers never expect to retire at all.
Sir Nigel Wilson, Chief Executive, Legal & General Group:“Even as we see companies developing a sense of purpose beyond profit, a large percentage of American gig workers have been reflecting this trend in microcosm. When it comes to how they earn their living, they land hard on the side of purpose, individualism and free thinking. With the ranks of freelancers growing, large employers will clearly have to take a good hard look at what they are offering their salaried workers beyond a steady pay check. The labor environment is changing, and the private sector, increasingly looking to be agile, needs to change with it.”
Gig workers have to double as their own CFO
Legal & General’s study looks at the multifaceted societal factors leading to gig workers’ long-term financial insecurity, including the added stress of managing their own long-term financial matters far more conscientiously than traditionally employed W2 workers do.
John Godfrey, Director of Levelling-Up, Legal & General Group:“Our research points to some key differences between gig workers in the U.S. and those in the UK, notably the different mindset the two groups have toward saving. Parsing the issue for U.S. freelancers has allowed a view into some potential solutions to freelancers’ financial anxiety, particularly around unmet insurance and retirement needs. We hope some of the ideas presented in this report will lead to innovation that can create better financial habits and, in the end, improved long-term financial security for gig workers.”
Further information
Meir Kahtan
Meir Kahtan Public Relations, LLC
T: +1 917-864-0800
Notes to editors
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY23) of which c40% (circa £0.5 trillion) is international.
We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.
As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.