WiredGov Newswire (news from other organisations)
6.3 million employees are still without a workplace pension
New data published yesterday by the Office for National Statistics reveals that 6,349,000 UK employees are not receiving employer contributions to a workplace pension.
- New official figures show need to extend auto-enrolment to all employees, says TUC
Auto-enrolment into workplace pensions has been in place since October 2012. It has helped increase the proportion of employees with workplace pensions from 47% in 2012 to 77% in 2019.
However, millions of workers are still excluded because employers do not have to automatically enrol staff earning less than £10,000 a year, or under the age of 22.
The rules also exclude the first £6,136 of pay when calculating the minimum contribution based on wages earned.
The combined effect means that low-paid workers miss out on up to £300 of annual pension contributions from their employer.
Part-time workers are at particular risk of missing out. Just 58% of part-time employees belong to a workplace pension, compared to 86% for full-time workers. This means women are disproportionately affected, as they are three times more likely to be in part-time work.
The TUC says that workers generally need total contributions of at least 15% of their wage to be sure of a decent income in retirement. The union body is calling on the government to remove the earnings limits, and to raise the minimum contribution required from employers.
TUC General Secretary Frances O’Grady yesterday said:
“Automatic enrolment has helped many more working people get pension contributions from their employer.
“But the current rules exclude lots of low-paid and young workers. And that’s why so many people still don’t have a workplace pension.
“No more excuses – it’s time the government ended this injustice. Pension schemes are a vital part of earnings. There should be a pension contribution in every pay packet.”
- Workplace pension rules: All employers must offer a workplace pension scheme and automatically enrol workers if their annual earnings are at least £10,000 and they are 22 years old or above.
Workers who earn between £6,136 and £10,000 can still opt in. But if a worker is on less than £6,136 annually, the employer does not have to allow them entry to the scheme or make contributions.
The scheme currently requires minimum contributions relative to wages of 3% from the employer and 5% from the employee – a combined minimum of 8%.
But this 8% is calculated on ‘band earnings’ - between £6,136 and £50,000 – meaning contributions for many workers are significantly lower than 8%.
- Rule changes the TUC is calling for:
- Remove the £10,000 trigger: so that all low-paid and part-time workers can be auto-enrolled, and the gender gap in pensions provision can be reduced.
- Remove the £6,136 lower earnings limit: so that all the hours a person works can count towards their pension.
- Reduce age qualification to 18 years old: so that millions more young workers can be auto-enrolled to a workplace pension.
- Higher minimum contributions: the government should set out a roadmap of staged increases to minimum contributions to reach a total of 15% of wages, with at least 10% coming from the employer.
- Workers missing out on ‘up to £300’: This is based the amount that a worker on just below £10,000 would receive in annual pension contributions from their employer if there were no lower earnings limited and they were automatically enrolled. Those on lower earnings would receive lower contributions, commensurate with the 3% minimum rate.
- ONS pensions data: Yesterday’s release of pensions data from the Office for National Statistics can be found here: https://www.ons.gov.uk/releases/employeeworkplacepensionsintheuk2019provisionaland2018revisedresults
- TUC Pensions Conference 2020: The TUC’s annual Pensions Conference will take place on Tuesday 24 March 2020 at Congress House. Further details and registration are here: https://www.tuc.org.uk/events/pensions-last-tuc-pensions-conference-2020
Latest News from
WiredGov Newswire (news from other organisations)
CBI NI responds to latest review of covid restrictions14/05/2021 16:38:00
CBI NI yesterday responded to latest review of covid restrictions.
Work from Home Day: new laws needed to make flexible working patterns available for all workers after pandemic14/05/2021 14:05:00
Today (Friday) is the 16th annual Work from Home Day, organised by Work Wise UK as part of Work Wise Week – a week of activity to promote employment practices that improve work-life balance.
CBI Wales responds to latest relaxation of COVID-19 restrictions14/05/2021 12:15:00
CBI Wales yesterday responded to latest relaxation of COVID-19 restrictions.
Business and government must stand united to tackle great challenges of the age – G7 business groups14/05/2021 09:05:00
Leading business federations issue communique backed UK by Prime Minister ahead of G7 leaders’ meeting next month in Cornwall.
TUC: Yorkshire still facing job losses and shrinking economy despite national GDP growth13/05/2021 16:05:00
Commenting on yesterday’s (Wednesday) GDP figures, showing a reduction of 1.5% for the first quarter of 2021 overall but a rise of 2.1% in March, the TUC urged caution based on regional data showing sustained negative growth and job losses across the region.
LGA responds to DEFRA’s Action Plan for Animal Welfare13/05/2021 14:40:00
Cllr Nesil Caliskan, Chair of the LGA’s Safer and Stronger Communities Board, commented on Rural Affairs’ Action Plan for Animal Welfare
NHS Confederation - Lessons from COVID inquiry must translate into action13/05/2021 13:40:00
Danny Mortimer, chief executive of the NHS Confederation, commented on the announcement of a public inquiry into COVID-19
LGA responds to ending of ban on eviction enforcement13/05/2021 12:40:00
Cllr David Renard, Local Government Association housing spokesperson, responded to the announcement of the ending of the current ban on bailiff-enforced evictions on 31 May
CBI responds to release of Q1 GDP figures13/05/2021 12:15:00
CBI yesterday responded to release of Q1 GDP figures.
Audit Scotland - Accounts Commission for Scotland and Improvement Service collaboration focused on improving local government services13/05/2021 11:40:00
The Accounts Commission and the Improvement Service have confirmed a formal collaboration focused on accelerating the improvement and pace of change in local government services.