Expert: Auto-enrolment pensions change hits women hard

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01 Apr, 2014

Expert: Auto-enrolment pensions change hits women hard

Women are already at a disadvantage when it comes to their savings because a large portion of them are stuck in part-time, low-earning positions. Then there’s also the pay gap issue… but that is a whole other can of worms on its own. Focusing more on the pensions debate, the Guardian has just announced that thousands of women are due to receive a heavy blow in the near future as they will not be put into their workplace pension under the auto-enrolment scheme on the back of the rise in the earnings limit in April.

The auto-enrolment scheme was introduced in October 2012 in the effort to handle the alarming poverty crisis among the older demographic of UK society. However, the earnings threshold for workers who qualify will go up from £9,440 to £10,000 in April, meaning that 170,000 fewer people will be allotted a place in their employer's scheme. The vast majority of those, about 120,000, are women, according to calculations from Scottish Widows.

Director of employer relationships at Scottish Widows Jackie Leiper said that the change in the threshold clearly has a disproportionate effect on women. However, there are solutions to the issue, Leiper said, such as greater access to education on saving, along with “simple structural changes.” “Widening the scope for paying into a pension outside of paid employment and allowing couples to plan for retirement together,” would also be very helpful, she added.