You are here: Home - Retirement -

Women set to lose out thousands in pensions contributions

0
Written by:
12/10/2012
Over half a million low-paid workers, 80% of whom are women, could lose thousands of pounds in employer pension contributions, according to the TUC.
Women set to lose out thousands in pensions contributions

The union says that if ministers go ahead with plans to raise the earnings trigger, the earnings level from which employees will be automatically enrolled, for people to be auto-enrolled into workplace pensions, hundreds of thousands of low-paid workers will miss out unless they voluntarily sign up to the scheme.

Under pensions auto-enrolment, which started for employees in some of the UK’s biggest companies earlier this month, employers and employees will pay contributions on earnings above £5,564, but only if staff earn above £8,105.

However, the government is currently consulting on raising the lower earnings limit and the earnings trigger to £5,720 and £9,205 respectively.

Brendan Barber, TUC general secretary, said: “With two thirds of employees no longer saving into a workplace pension, auto-enrolment cannot come soon enough if we are to start tackling the UK’s growing pensioner poverty crisis.”

TUC analysis of official earnings data shows that around 3.5m workers earn less than £8,106 a year, and would therefore not be automatically enrolled into a workplace pension.

Raising the trigger to £9,205 next April will mean a further 585,000 staff will fall below the earnings trigger.

“It’s disappointing therefore to see that over half a million low-paid workers could soon be missing out. Women and part-time workers are the least likely to save into a pension.

“They should be a core target for auto-enrolment, not the main losers from government plans to restrict access to the scheme.”

Of those workers set to miss out on auto-enrolment if the earnings trigger is raised, 457,000, or 78%, are female and 506,000, or 86%, are part-time workers.

Low-paid women and part-time workers are the least likely to be saving into a workplace pension and should be a core target for auto-enrolment, not the focus of those excluded from it, says the TUC.

The union also points out that if the government continues to raise the earnings trigger in line with the personal allowance, which will eventually rise to £10,000, an additional half a million workers could miss out on auto-enrolment.

“The government should show they are fully committed to auto-enrolment by ensuring that as many people as possible are eligible to be enrolled into saving for a pension.”

The TUC is calling on the government to freeze the earnings trigger for auto-enrolment at £8,105, as well as the lower earnings limit at £5,564.

The TUC also wants the upper limit on employer contributions to be increased to £42,971 so that the proportion of earnings upon which pension contributions are made steadily rises each year.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five apps to help you to save money without realising

Are you looking to get your finances under control ahead of a fun (but expensive) Christmas? Here are five way...
Five apps to help you to save money without realising

Rightmove: house prices set for zero growth in 2019

Homes listed for sale in 2019 are predicted to have the same average asking price as this year, although a Nor...
Rightmove: house prices set for zero growth in 2019

FTSE tumbles to 1999 tech bubble peak

Stock markets sold off this morning, with the FTSE 100 hitting the same level it reached on 31 December 1999. ...
FTSE tumbles to 1999 tech bubble peak

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
Investors cheer Hargreaves to top of FTSE leaderboard

Record revenues for the last quarter have helped make Hargreaves Lansdown the biggest riser in the FTSE 100 in early...

Close