Tim Gosling, Policy Lead, Defined Contribution at the PLSA, said: “We welcome the Government’s response to the Taylor Review. By consulting on whether to redraw the line on who is deemed self-employed and who is a worker, it offers the prospect that some gig economy workers may in future benefit from a workplace pension. This is important and welcome as it will help to prevent employers wrongly categorising people as self-employed and therefore not eligible to be enrolled into a workplace pension.
“Today’s announcement will not, however, help solve the problem of how to involve the traditional self-employed in workplace pension saving. The Government acknowledges that more needs to be done and has committed to testing difference solutions for the self-employed over the coming year. We will continue to work closely with Government as well as the rest of the industry to look at options which will help this important and growing demographic to tackle the retirement savings challenge.”
Darren Philp, director of policy at The People’s Pension, said: “It’s encouraging that the majority of recommendations from the Taylor review have been accepted by the government. But at a time when self-employed people still aren’t covered by auto-enrolment, and only around two in ten people who work for themselves are saving into a pension, the lack of any detail over getting the self-employed into pensions is disappointing.
“The greater emphasis on cross-departmental co-operation is welcome though, as it’s only through this cooperation that the Government will really be able to deliver the meaningful changes that the system so desperately needs.”
Kate Smith, Head of Pensions at Aegon: “The world of work is rapidly changing and we welcome the move to give all workers greater clarity of the employment rules and entitlement to basic rights such as holiday and sick pay already enjoyed by employees. There are 5 million self-employed individuals representing 15% of the UK’s workforce and this is set to increase. Of these 1.3 million are gig-economy workers which is amongst the fastest-growing sectors of the economy but many of these workers face low and irregular pay.
“While we welcome the clarity the government’s plans give to gig economy workers over their employments status the government has failed to address the issue of pensions, which could turn out be the most valuable benefit of them all. In the UK pension provision is largely delivered through the workplace, via auto-enrolment, so the self-employed, including gig-economy workers are currently excluded. The right to an employer contribution should be carved in stone for all workers.
“Following the Government’s recent review of auto-enrolment, it promised to look at how to kick-start the self-employed into pension saving. Government needs to grasp the nettle and address this growing savings gap before it’s too late
Steve Webb, Director of Policy at Royal London said:‘It is welcome that the Government is planning to take action on some of the ways in which ‘gig economy’ workers can lose out. The idea of an enhanced minimum hourly wage for those on zero hours contract is well worth further investigation. But despite Matthew Taylor’s recommendations, the government response offers little hope for improving the pensions of the self-employed. The Government’s automatic enrolment review merely proposed some further research and testing on pensions and the self-employed, which is not up to the urgency of the problem. Pension membership amongst employed workers has soared because of automatic enrolment, but it remains shockingly low for the self-employed. It is very worrying that this issue has again been kicked ‘into the long grass’, meaning that millions of self-employed people face an insecure retirement’
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