TUC - More than a million low paid women lose out from new auto-enrolment threshold
28 Mar 2012 10:56 AM
More than a million low paid women could lose out on employer pension contributions after the government raised the new earnings threshold for pension auto-enrolment yesterday (Tuesday), says the TUC.
Employers and employees pay contributions on earnings above £5,564 following the start of pensions auto-enrolment in the autumn, but only staff with earnings above £8,105 will need to be auto-enrolled into a pension by their employer. This means that staff earning above the £5,564 minimum earnings band, but below the auto-enrolment threshold, will lose out on pension savings unless they voluntarily sign up for the scheme.
A TUC analysis of official figures has found that 865,000 women earn between £5,564 and £7,605 (last year's national insurance primary threshold), while a further million women earned between £7,605 and £10,000. It is likely that over a million low paid women will therefore lose out from the new earnings threshold for auto-enrolment, says the TUC.
TUC General Secretary Brendan Barber said: 'The government's decision to link the auto-enrolment threshold to the PAYE tax threshold is bad news for the low paid, most of whom are women working part-time.
'Whatever the merits of raising the tax threshold in the budget, it will have a wholly bad knock-on effect on pensions for the low paid.
'A key focus of pension reform has always meant to be improving women's pensions, yet every adjustment to auto-enrolment seems to chip away at women. And if the tax threshold is raised again it will only get worse.'
NOTES TO EDITORS:
Employees earning between lower earnings band (£5,564), national insurance primary threshold (£7,605) and £10,000
|
Total employees (1,000s)
|
Earning less than lower earnings band
|
Earning between lower earnings band and national insurance primary threshold
|
Earning between lower earnings band and £10,000
|
All employees earning less than £10,000
|
All UK employees, per cent
|
|
8.3
|
4.6
|
9.8
|
18.1
|
Total UK employees
|
24,385
|
2,024
|
1,122
|
2,390
|
4,414
|
Males, per cent
|
|
4.4
|
2.1
|
4.4
|
8.8
|
Total males (thousand)
|
12,370
|
544
|
260
|
544
|
1,089
|
Females, per cent
|
|
12.2
|
7.2
|
15.5
|
27.7
|
Total Females (thousand)
|
12,015
|
1,466
|
865
|
1,862
|
3,328
|
Female part time, per cent
|
|
26.5
|
15.8
|
32.7
|
59.2
|
Total female part time (thousand)
|
5,160
|
1,367
|
815
|
1,687
|
3,055
|
Source: Annual Survey of Hours and Earnings 2011
- Figures are all workers, including those outside the age range for auto-enrolment. This is likely to overstate low paid workers.
- All TUC press releases can be found at www.tuc.org.uk
Contacts:
Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk