'Pensions for All' Won't Work

FUTURE PROOF: Labour MP Rachel Reeves has proposed that low paid workers are auto-enrolled in pension schemes, but 4% contributions are too steep

Emma Wall 30 May, 2014 | 9:21AM

Pensions should not just be for the privileged but instead for all workers, claims Labour’s Rachel Reeves. The shadow secretary for Work and Pensions has proposed that auto-enrolment be extended to include low paid workers, extending the eligibility thresholds down to £5,772.

Auto-enrolment was launched in October 2012 starting with the country's largest companies and around 10 million people will eventually be enrolled into schemes by 2018.

Millions of workers will be left out of the scheme however – an estimated 4 million so far. These workers do not qualify for auto-enrolment because they earn less than the minimum threshold, are too young - or are older than the state pension age. Because many of these workers are part-time a disproportionate amount of unenrolled workers are woman. Women are more likely to have flexible working hours following childbirth.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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