By Vicky Shaw
Source: Yahoo! Sport

Only about 58% of part-time UK employees have a workplace pension, figures show.

Nearly nine in 10 (86.4%) employees who work full-time have a workplace pension, but that figure falls to just over half (57.8%) of those working part-time, according to the Office for National Statistics (ONS).

The figures, from 2020, also show that just over a third (34.8%) of people with a workplace pension are in a “gold-plated” defined benefit (DB) scheme, which will guarantee a certain level of income in retirement based on their salary.

Employees aged 50 to 54 are the most likely to be in a DB pension scheme.

Jamie Jenkins, director of policy and external affairs at Royal London, said: “While we see high levels of participation for full-time staff, more needs to be done to boost the numbers of part-time workers in workplace pensions.

“Similarly, contribution rates to private sector, predominantly defined contribution schemes, continue to lag significantly behind their public sector counterparts, who are more likely to have defined benefit schemes.

“If we want to see people retiring well with their defined contribution pensions then we need to see further action to boost minimum contribution rates.”

Tim Gosling, head of policy at the People’s Pension, said: “One of the most effective ways of ensuring more part-time workers have the option of saving into a pension would be lowering the earnings threshold for automatic enrolment from £10,000 a year to £6,240.”

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Putting people into workplace pensions automatically has been an incredible success, but there are still enormous numbers of people who fall through the cracks.

“Far fewer part-time workers are in their pension scheme, partly because more of them earn below the minimum threshold.

“Then there are those who are too young to qualify, and self-employed people who fall out of the system entirely.

“Meanwhile, there’s a risk that those who’ve joined their schemes aren’t paying in anywhere near enough.

“The statutory minimums on these pensions mean overall 8% (of eligible salary) has to go into the pension, with employers paying at least 3%.

“Typically, employers are paying 2% to 4% and employees 4% to 5%, so plenty of employees will be getting combined contributions way below the level they need for a comfortable income in retirement.

“Compare that to defined benefit schemes where typically the employee pays in 7% or more and the employer 20% or more.”

Ms Coles said those receiving the minimum amounts into their pension should check whether their employer will match it if they increase their contributions.

She suggested: “Even if they don’t match contributions, use a pension calculator to see what you should be paying in at this stage to hit your targets.

“Then go back to your household budget and see whether you can free up any more cash to boost contributions.

“The aim is to get the biggest pot of money for your retirement, but that’s not just about paying more in, it’s also about where you invest.

“You need to grips with the investments within your pension, so you can ensure your money is working as hard for you as it can.”

A Department for Work and Pensions spokeswoman said: “Automatic enrolment has been an extraordinary success, with over 10 million workers enrolled into a workplace pension to date and an additional £22.7 billion per year being saved compared to 2012 among eligible employees.

“The Government’s ambition for the future of automatic enrolment will enable people to save more and to start saving earlier by abolishing the lower earnings limit for contributions and reducing the age for being automatically enrolled to 18 in the mid-2020s.

“Right now we’re delivering our plan to create and protect jobs to help people secure their financial stability today, helping them plan for tomorrow and the retirement they want.”