Multi-jobbers losing out on £76m a year in pension contributions

Workers on the lowest salaries with more than one job are losing out on £76m a year in employer pension contributions due to an “unfair” system, according to a new study from Scottish Widows.

With more than four million people in the UK having more than one job, the pensions expert has called for the government to scrap automatic enrolment thresholds.

This is because no matter how much a worker earns in total, they are excluded from being automatically enrolled into the company pension where a job pays less than £10,000 a year. Scottish Widows highlighted that while the success of auto-enrolment relies on people doing nothing, the lowest earners in society “miss out” on the benefit of this behavioural nudge.

The study, based on research across a total of 5,010 adults, found that almost half (49%) of multi-jobbers earning under the threshold are not enrolled in their company pension as a result, compared with 23% across all employees.

Against the backdrop of the coronavirus crisis, Scottish Widows also suggested the problem could be about to “explode”. The research revealed that more than half of current multi-jobbers (55%) have taken on an additional job since the start of the pandemic – meaning that more potential earnings are not being saved into a pension, not benefiting from tax relief nor being matched by employer contributions.

Scottish Widows retirement expert, Pete Glancy, commented: “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.”

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