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

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

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.