A study by investment firm Fidelity has revealed that two-thirds of 23-38-year-olds who work for themselves do not have any form of pension, with 74% saying they simply cannot afford to save for later life.

This is particularly worrying as millennials account for 30% of the self-employed workforce and a further three in ten say they would like to be their own boss in the future.

The government’s auto-enrolment initiative, which sees employed workers automatically entered into their workplace pension scheme unless they explicitly opt out, has successfully boosted the number of people saving for retirement since its launch in 2012.

However, auto-enrolment does not yet apply to self-employed workers, meaning the impetus to save into a pension is on them.

The report reveals that self-employed millennials have more pressing savings goals with 40% saving for a holiday, 34% saving to buy a new home, and 20% saving to take a career break.

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Yet starting early makes a big difference when it comes to pension saving, with Fidelity calculations showing investing while still in your 20s could leave you as much as £60,000 better off in retirement.

Emma-Lou Montgomery, associate director at Fidelity, said: “The beauty of youth – never more so than when it comes to saving and investing – is that time is firmly on your side.

“Every penny you put aside in your 20s (or younger) will grow into something worthwhile, thanks to the magical power of compounding. This is when the returns you make on your hard-earned cash start to generate their very own returns. All without you having to do anything more than stay invested.”

What can self-employed millennials do now?

Here are Emma-Lou Montgomery’s four savings tips:

Make your future self a priority

You automatically fork out for gym membership, Netflix and Spotify so it’s time to add yourself to the list too. Set up a standing order into your ISA or SIPP and make saving for your future automatic.

Give your future a shot of caffeine

Your morning shop-bought coffee at £2.50, five days a week can easily consume up to £50 a month. If you gave up your daily caffeine kick and put this money to work in a stocks and shares ISA, you could generate up to £3,307.61 after only five years, £7,303.68 after ten years, £12,131.51 after fifteen years and £17,964.25 after twenty years.

Who needs employer contributions when you can kick-start your financial future with a caffeine shot?

Set up a SIPP

Contributions made into your SIPP will attract tax relief at 20%, which is claimed by your provider and added to the pension. If you pay tax at more than the basic rate, just like your employed counterparts, you can claim any additional tax relief you may be due through your self-assessment tax return.

Flex your self-employed muscle

When you work for yourself your income can rise and fall. It can be tough when you hit a lean patch, but on the flipside if you have a bumper year, use that to your advantage.

You can save as much as you like into your pension; it’s just that you only generally get tax relief on the first £40,000 you save in the current tax year.

But of course, any additional pension savings are still worthwhile. They might not attract tax relief but they still stand to benefit from investment growth.