RETIREMENT ROADBLOCK: Why the vast majority of taxi and private hire drivers are heading towards a pension shortfall
- Perry Richardson
- 3 hours ago
- 4 min read
For the thousands of drivers who keep Britain’s streets moving day and night, the idea of a well-earned retirement is becoming more distant with every fare. The latest stats for self-employed workers as a whole suggest that around seven in ten drivers are heading for their later years with little or no pension savings in place. It’s a sobering reality that cuts right to the heart of how the industry is structured and how the self-employed workforce as a whole has been left behind when it comes to financial security.
The problem isn’t new, but it is deepening. Two forces collide to create the issue: the self-employed nature of taxi and private hire driving, and the lack of automatic pension enrolment that regular employees enjoy. When most drivers are classed as self-employed, the safety net of an employer contribution or HR-department reminder simply doesn’t exist. It’s entirely down to the individual to plan, save and invest, and when your earnings depend on the next booking, that’s easier said than done.
Across the wider self-employed population, the numbers make grim reading. Only about 20% of those working for themselves have a private pension in place. A think tank recently reported that “over four in five” self-employed workers make no retirement contributions at all. The taxi and private hire world fits neatly into that statistic. While hard data focused purely on the trade is limited, anyone with experience in the sector will confirm that pension saving is low, sporadic and often non-existent.
Why drivers are particularly exposed
Driving a taxi or private hire vehicle has long been a profession built on independence. Most drivers operate as sole traders or small limited companies, with no formal employer structure. That freedom brings flexibility but also removes many of the financial guardrails that traditional employment offers. No HR department, no matched pension contribution, and no one to nudge you to set something aside for later.
The income pattern doesn’t help either. Some weeks are busy, others painfully quiet. Fuel costs, insurance, maintenance and vehicle finance can quickly swallow up a large slice of takings. After that, there’s little left to lock away in a pension fund. The average driver is more likely to be thinking about keeping the car on the road this month than about life in 20 years’ time.
There’s also a knowledge gap. Many drivers simply don’t know where to start with pension saving, and the process can feel detached from daily working life. When cashflow is king, it’s difficult to part with money for something that won’t pay back until you’ve hung up the keys.
The age profile of drivers adds another twist. Increasingly, people enter the trade later in life — sometimes after redundancy, career changes or early retirement from other roles. That means fewer years to build up a decent pension pot, and many end up driving well into their sixties or even seventies. For some a pension has already been amassed and the job of driving a taxi is simply to top up those pots.
Life at the wheel without a pension
For those with no private or workplace pension, the State Pension becomes the only dependable source of income in retirement. At just over £11,000 a year, it’s designed as a basic safety net, not a full replacement for a working income. Once rent, council tax, and rising utility bills are paid, there’s not much left for the occasional holiday, let alone a comfortable standard of living.
Many drivers quietly accept that they’ll keep working for as long as their health allows. There’s an unspoken reality that “retirement” in the traditional sense, clocking off and enjoying a slower pace, might never fully arrive. As one cabbie told us recently, “I’ll stop when my knees do”.
Earlier this year, we summed it up in TaxiPoint with a line that still rings true: Retirement is often more of a journey than a destination. For many behind the wheel, it’s simply a question of how long they can keep driving.
The wake-up call
The trade needs a frank discussion about what comes next. The days when a good run of work could see you into a comfortable retirement are over. With rising costs, volatile fuel prices and uncertain demand, drivers can’t rely on goodwill or luck to secure their future.
Change can only happen in two ways: drivers take personal steps to save, or the system evolves to help them. The responsibility falls to individuals. Every driver should ask themselves what, if any, pension arrangements they currently have. Even a small contribution started today can make a difference later. For those already paying into a pension, it’s worth checking if the pot is on track to last through 20 or 30 years of retirement.
A glimmer of hope
It’s not all bad news. Financial advisers say that careful planning, even started later in life, can still help drivers improve their position. Regular, manageable contributions, no matter how small, add up over time. There are also tax benefits: pension contributions can reduce taxable income, offering some immediate relief from the yearly bill to HMRC.
Getting professional advice is a smart move. An independent financial adviser familiar with self-employed earnings can help tailor a plan that fits irregular income patterns and seasonal fluctuations. Even drivers who feel they’ve left it too late can often find ways to strengthen their finances before stepping away from the wheel.
The trade has weathered plenty of storms, regulation changes, technology shifts, pandemics, and everything in between. But this looming pension gap could be one of the biggest challenges yet, precisely because it creeps up quietly and affects almost everyone.
