The gig economy, the employment model where workers act as independent contractors rather than employees, is expected to have a destabilizing effect on personal financial security, according to a new report from Prudential Financial.

Gig economy workers do not receive employee benefits, leading to a major gap in coverage for short- and long-term disability, life insurance and employer-sponsored retirement plans, according to the “Gig Workers in America: Profiles, Mindsets and Financial Wellness” report.

In fact, only 7% of gig economy-only workers — those without access to employer-sponsored benefits — have long-term disability insurance, while 16% have access to a retirement savings account, compared to 52% of full-time employees, according to the research.

“The money made by gig work may contribute to reducing the national income gap, but the decline in employer-sponsored savings and insurance plans is doing little to address the wealth gap,” says Andy Sullivan, president of group insurance at Prudential. “Without benefit protections, many gig workers are left financially vulnerable. While working independently has its rewards, the uncertainty of gig income makes it difficult for people to prepare for emergencies or save and invest toward achieving important financial goals.”

Employers, policymakers and those in the financial services sector face a difficult challenge, though: Americans already struggle with saving for retirement even if they have access to a 401(k) plan, so why should gig economy workers be any different?

See also: New bill aims to provide coverage to gig workers

“We already know that everyone has a hard time considering retirement savings 30 or 40 years out, especially when they have issues paying down student debt or with short-term financial goals,” says Snezana Zlatar, senior vice president of full service solutions, product and financial wellness, at Prudential Retirement. “They are achieving financial security to address their overall financial being as opposed to looking at it in the context of future retirement.”

The report found that gig economy generally yields a high level of satisfaction for full-time freelancers. More than three in five millennials (67%) reported that they like their current work situation and wouldn’t want to change it, and three in four workers over the age of 56 reported the same sentiment. Only 45% of Gen X gig-only workers reported satisfaction with their work, according to the report.

As the segment of contracted workers grows — it jumped to 16% of the workforce in 2015 from 10% in 2005, according to a study by economists Lawrence Katz and Alan Krueger — the retirement landscape will become more fraught, especially for millennials.

Seven in 10 millennial gig-only workers, or those without a job that provides benefits, have no access to benefits, compared to 44% of gig-only workers over the age of 55, according to Prudential’s research. The Harris Poll conducted the Gig Worker On-Demand Economy survey online and polled 1,491 workers on behalf of Prudential.

The implications of an entire generation without retirement savings can be detrimental, Zlatar says. “Without a sizable savings for healthcare and other basic services past retirement age, the number of Medicare enrollees could skyrocket.

“That should be one of the main incentives to encourage the public sector and private sector to seek solutions,” she says. “It’s not just about the wellness effect for individuals. It’s about reducing future reliance on government programs.”

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