Part-time Employment: Females

(asked on 11th February 2019) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps her Department is taking to support low paid women in part time jobs to save for retirement.


Answered by
Guy Opperman Portrait
Guy Opperman
Parliamentary Under-Secretary (Department for Transport)
This question was answered on 19th February 2019

Automatic Enrolment has reversed the decline in workplace pension saving. Latest figures show that more than 10 million workers have been automatically enrolled into workplace pension by more than 1.4 million employers. By 2019/20 an estimated extra £18.4 billion a year is estimated to go into workplace pensions as a result of Automatic Enrolment.

Automatic enrolment was designed specifically to help groups who historically were poorly served or excluded from workplace pension saving, such as women and lower earners. In 2012, 60% of eligible women in the private sector did not have a workplace pension. As of 2017, this had fallen to 20% and the participation rate for women in the private sector is now near equal to men.

The earnings trigger determines who is eligible to be enrolled by their employer into a workplace pension. The DWP reviews the trigger annually, and in doing so considers whether the people brought into pensions saving are likely to benefit, paying particular attention to the impact of this on groups currently under-represented in pension saving such as women and low earners.

The decision to maintain the trigger at £10,000 for 2019/20 continues to strike a balance between affordability for employers and individuals, while delivering on our policy objective of continuing to give low to median earners, who are most able to save, the opportunity to do so. This also provides a level of stability, with the second phased increase in contributions due to take place at the start of the 2019/20 tax year. Lowering the trigger could result in diverting income away from the day-to-day needs of the lowest earners and impact significantly on their living standards. For those low earners who are in a position to contribute, however, the option remains to opt-in to saving, and if they earn above the lower earnings limit they will also receive employer contributions.

The Government is committed to building on the success of Automatic Enrolment. The 2017 review sets out our ambition for the mid-2020s, with proposals to strengthen financial resilience for young people and lower earners, including those who have multiple part-time jobs. However, we will not force the pace of change in Automatic Enrolment and want to understand properly the impact of the 2018 and 2019 increases in minimum contribution rates, and work with stakeholders to build the consensus on which the success of Automatic Enrolment has been based, before committing to a timetable for the proposed changes.

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