Multi-jobbers Mini-pensions

alright for some

Scottish Widows are calling for the  £10,000 earnings threshold before someone’s automatically  placed in a workplace pension should be scrapped.

If you’re job pays less than £10k pa, you have to opt-in to a workplace pension and multi-jobbers miss out on the auto-enrolment boom because they and perhaps their employers, are simply unaware of the value of saving.

This could particularly be an issue for people juggling several jobs, some or all of which pay less than £10,000.

Alarmingly, its research found that one in 20 (5%) people with multiple jobs and at least one paying under the £10,000 threshold had missed out on  enrolment into the company’s workplace pension by their employer.

Scottish Widows suggests that some employers either do not understand the rules, or are preventing access for workers. @PensionsPete Glancy, Scottish Widows’ avuncular guru is clear

The argument to remove the earnings threshold is getting stronger and should be a top priority for the next evolution of the scheme


So how big is the problem?

More than four million people in the UK have more than one job.   More than half (55%) of current “multi-jobbers” have taken on an additional job since the start of the coronavirus pandemic.

For those earning between £6,240 and £10,000 per year who choose to opt in, their employer must also contribute 3% of eligible wages.

Those earning less can still opt in, but their employer is not compelled to contribute.

Two-fifths (43%) of people surveyed for Scottish Widows believed that all workers were automatically opted in regardless of how much they earn, suggesting that many people do not understand the rules.

@pensionspete Glancy

Credit @PensionsPete for this simple message which should resonate with a Pensions Minister who is also Minister for Financial Inclusion

“While auto-enrolment has been a game-changer for boosting the workplace pension pots of millions across the UK, those whose income comes from more than one job are losing out significantly relative to those with the same income from a single job.

“This was an issue that we first highlighted in 2018 based on research conducted at that time, and our latest research suggests that the problem is not going away.

“A shift towards more multi-jobbers will reverse some of the gains made by auto-enrolment, so the argument to remove the earnings threshold is getting stronger and should be a top priority for the next evolution of the scheme.”

Research was carried out by Opinium among more than 5,000 adults.

It’s not just Scottish Widows who’ve picked up on this anomaly

Phil Brown, director of policy at B&CE, the provider of the People’s Pension told the Belfast Telegraph this week

“Auto-enrolment has been a huge success and has enabled more than 10 million people to start saving for a pension during the past nine years. However, it could benefit even more people if Government lowered the earnings threshold for auto-enrolment to £6,240.

“This would allow an additional 1.2 million low paid workers, the majority of whom are women, the opportunity to start saving for their retirement. We think that ministers should make this, along with lowering the age threshold for auto-enrolment from 22 to 18, a priority, once the post-Covid economic recovery is complete.”

A Department for Work and Pensions spokeswoman said: “Our ambition is to abolish the lower earnings limit for contributions altogether as well as reduce the age for being automatically enrolled to eighteen.

“In introducing automatic enrolment we focused on getting the right balance between ensuring that the people most likely to benefit from saving are brought into pensions, and the affordability for individuals and employers. We’re committed to building on this, enabling people to save more and to start saving earlier.”

The Department aims to abolish the lower earnings limit and reduce the age for automatic enrolment in the mid-2020s.

But how much more do those in low paid jobs have to put up with. Ros Altmann is right to pick up on the fact that many of these low earners who do make it into workplace pensions , then miss out on the promised Government incentive because they fall into the net-pay anomaly.

It would seem that these low-earners are becoming the pension untouchables.

“Untouchable” is a name given to the lowest caste in India

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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