Automatic enrolment into a workplace pension excludes a third of female workers in the UK, leaving many at risk of a low income after retirement.
Research conducted by the Pensions Policy institute and sponsored by Age UK found that just under a quarter of all employees are not eligible for auto-enrolment – with 57 percent of those due to earnings falling below £10,000 a year – yet the number of women who do not meet the criteria is double the 16 percent of men.
Andy McCabe, Managing Director, Selectapension said:
“There’s no doubt that the introduction of auto-enrolment has changed peoples’ financial planning habits, but it’s still not an even playing field, with women far less likely to be eligible for the scheme.
“It is vital for the industry to address the gender divide between men and women in saving for their future so that women, especially those on lower incomes, do not face a financial shortfall in their retirement. Planning and education will be crucial to ensure that those who do not qualify for auto-enrolment separately are setting aside long-term pensions savings.”
The research also highlights the struggle for disabled workers, ethnic minorities, those receiving Carer’s Allowance and those working in multiple jobs or in the service industry.
81 percent of workers receiving Carer’s Allowance do not qualify for auto-enrolment, as well as 30 percent of disabled workers, which amounts to 900,000 people.
Caroline Abrahams, Charity Director at Age UK, said: “While automatic enrolment has so far been a resounding success at engaging more people in pension saving, these figures show that many lower earners are being excluded from workplace pensions.
“We must make sure that more people benefit so they do not reach retirement with an empty pension pot.
“We would like to see the auto-enrolment threshold lowered, so more people can enjoy a better-standard of living in retirement. With people living longer it is more important than ever that people get the chance of a private pension.”