Pensions - Articles - Gig workers missing out on employer pension contributions


Adrian Boulding, Director of Policy, at NOW: Pensions comments on the joint report by Parliament’s Work and Pension and Business Committees on self-employment and the gig economy which recommends that those employed in the gig economy be given “worker status by default"

 “Giving those employed in the gig economy worker status will mean that a greater proportion will have the opportunity to save into a workplace pension helping to improve their quality of life in retirement.

 “Currently, these 1.3 million* workers have few rights and are entirely excluded from the auto enrolment programme due to their self-employed status.”

 NOW: Pensions calculates that those employed in the gig economy could be missing out on £182m of employer pensions contributions annually, calculated at the auto enrolment 3% rate that becomes the minimum for employed workers in April 2019.

 Adrian explains: “For a full-time worker in the gig economy, active for 30 to 40 hours a week and earning a typical £10 per hour, they would gain between £300 and £400 a year of pension contributions from their employers.”

 However, the research undertaken by CIPD early in 2017 to support the Government commissioned review of the gig economy found that full time gig workers are the minority. Three out of every five have a traditional job as well, and are simply using their gig earnings as a top us.

 Adrian continues : “Part-timers in the gig economy will find the auto enrolment rules are stacked against them. They would need to earn £10,000 a year at their gig job to get auto enrolled, and the rule that excludes the first £5,876 of annual earnings from pension contributions will be applied twice, by both their traditional job and their gig work. Not only that but, as one in five gig workers have been in their current job for less than three months, their employer can postpone paying pension contributions until they reach that point.”
  

Back to Index


Similar News to this Story

Launch of the new Pensions Commission
Standard Life, Aegon, Aviva, Legal and General and PMI comment on the launch of the new Pensions Commission
Retirement confidence dips for 50 somethings
New research from Aegon reveals that only 33% of Britons aged 50–59 feel confident about retiring comfortably, the lowest of any age group. This midli
Pension Commission must deliver bold reforms
Comments from Kirsty Anderson, retirement specialist at Quilter on the DWP’s plan to revive the Pension Commission, including auto-enrolment reform an

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.