As many as 630,000 self-employed people in the UK could be relying upon their business to act as their pension rather than saving, research has suggested.

Some 64% of self-employed workers have not been saving for retirement through a private pension, according to Aegon’s fifth Readiness Report.

Steven Cameron, pensions director at Aegon, said: “It’s very worrying that only a third are paying into a private pension although those who do are more engaged and are contributing higher amounts.

“There are real risks in assuming that your business can fund you through retirement, and we would urge people to ensure they do have adequate, separate pension provision to see then comfortably through later life.”

The average amount the self-employed have saved in pensions was found to be £40,400. This was £5,200 more than the average across the rest of the population (£33,942).

The self-employed actually have more ambitious retirement expectations than the rest of the UK, the report suggested. They expected an annual retirement income of £45,700, £7,700 more than the UK average (£38,000), while they also expected to retire the earliest in the study at 63. However, a third (30%) expected to work into retirement, compared to 24% of payroll workers.

Mr Cameron said: “Our research shows the self-employed have particular needs and aspirations when it comes to saving for retirement.

“While future self-employed retirees will benefit from changes in state pensions, they are missing out on being automatically enrolled into a workplace pension with a valuable employer contribution.

“There’s also a significant gap between savings behaviours and very ambitious expectations for retirement, with the self-employed expecting to not only retire earlier, but also receive more income in retirement than payroll employees.

“The previous Chancellor’s proposed Lifetime ISA might have offered an attractive retirement solution for some self-employed, but with speculation over its future, we need to look more widely at how to address the retirement needs of this increasingly important sector.”