According to the Citizens Advice Bureau many people, primarily women, are missing out on their right to a workplace pension. The chief cause of this is working multiple jobs, something that women are currently much more likely to do than men.
Auto-enrolment was introduced a few years ago with the intention of making sure that all workers are given access to a pension through their employer, except those only working a handful of hours. Employers must automatically enrol any worker who is earning at least £10,000 a year into a workplace pension scheme unless that worker specifically opts out.
However, according to citizens advice over 100,000 people, the majority of them women, are being effectively excluded from auto-enrolment because they work multiple part-time jobs instead of having a single job. This means that, even though they are earning more than £10,000 in total and may be working full-time or close to full-time hours, they never reach the threshhold from any single job. As such, they do not qualify for auto-enrolment with any of their employers.
This issue has been recognised by the government. A review of the situation is expected to take place some time this year. A review of auto-enrolment was already due to take place in 2017, and in December the government said this would include looking into the issue of people who work more than one job.
It is not exclusively women who are affected by this issue, but there are significantly more women falling into this situation than men. Of the roughly 100,000 people affected, according to Citizens Advice, around 72,000 are female.
Gillian Guy, Citizens Advice chief executive, said: “Many people – particularly women – work several part time jobs, which helps them manage commitments like childcare or study.”
Guy continued: “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.”
According to a separate study, as well as being affected by this issue women are also missing out by being left with smaller pensions, on average, than their male counterparts. Issues like the gender pay gap and the greater impact of bringing up children on women’s careers is giving them less opportunity to contribute to their pension pots and, accordingly, smaller incomes upon retirement. Zurich, one of the UK’s major insurance companies and pension providers, has said that the difference at the point of retirement between an average man’s and woman’s pension pot will be around £47,000.