Women are being unfairly disadvantaged over pensions, because they are more likely to have multiple low-paid jobs and cannot meet auto-enrolment requirements, according to research by Citizens Advice, which is advocating a change to the rules
The charity says almost 106,000 working people are not being auto-enrolled into a pension because their earnings come from more than one job and 70% of these are women. To qualify for auto-enrolment workers need to earn over the £10,000 a year threshold from a single job. Its analysis found that in total 250,000 people have several jobs paying under £10,000 a year, meaning they do not qualify.
However, 40% of these people have a combined income from their jobs which exceeds £10,000. Women are particularly likely to be affected, with 72,000 missing out.
The Citizens Advice research also revealed that most employers do not see pension contributions as a burden to their business, with under one in five (18%) saying this is one of their key concerns for the future. This is well below those who say they are most worried about finding good staff (44%) and retaining them (36%).
A survey of over 1,100 line managers, senior managers and HR managers in public, private and third sector employers based in England and Wales reveals over two thirds (70%) of employers say they see some benefit of paying pension contributions.
However, many were not aware of future changes which will require them to pay a greater proportion of qualifying earnings into pensions, reaching 3% by 2019. The majority (55%) did not know what they would need to pay, and only 6% gave the correct answer.
Gillian Guy, chief executive of Citizens Advice said: ‘Many people - particularly women - work several part time jobs, which helps them manage commitments like childcare or study. But while in many cases they earn over £10,000, and pay tax on this combined income, they don’t have access to a workplace pension and miss out on the opportunity to save for their retirement.’
The charity is calling for the government’s auto-enrolment review - due out this year - to look at how the scheme can be extended to those missing out. Under current rules many people who work multiple low-income jobs or who are self-employed are not able to access a workplace pension via auto-enrolment. It also wants clearer communication to employers about their obligations.
