The number of workers not eligible to be saving into an auto-enrolment scheme has surpassed the total of auto-enrolled staff for five consecutive months.
Data from The Pensions Regulator published this week showed more than 10.1m savers have now been auto-enrolled, while almost 9.6m employees did not qualify to be included in a pension scheme.
However, as the number of people automatically enrolled grew by 17,000 in July that of non-eligible workers grew by 29,000.
This outperformance has been a trend since March 2019, the figures from TPR showed.
Workers automatically enrolled
Not eligible workers
In December 2018 the Department for Work and Pensions (DWP) published its long awaited auto-enrolment review, which announced a series of measures to capture more people into the AE net.
These included lowering the age of workers auto-enrolled into workplace pension schemes from 22 to 18 years and calculating contributions from the first pound earned, instead of the current £10,000 lower earnings threshold.
However, these changes will only be introduced in the mid-2020s.
According to Romi Savova, chief executive of Pension Bee, the rules governing auto-enrolment eligibility were arbitrary and she was concerned about the fact almost half of workers were considered ineligible.
She said: “Many will be part-time employees with caring responsibilities or on lower incomes.
“Worryingly, the data could indicate employers are structuring new jobs so as to avoid paying into pensions. The rules should be much simpler: if you are a worker, you should be automatically enrolled.”
Adrian Boulding, director of policy at Now: Pensions, agreed the growing numbers were due to the increasing popularity of part-time work.
He said: “And that in turn is a combination of women working part-time while caring for children or elderly relatives, and people who are combining two careers – one a regular job and one that is a hobby or artistic related occupation that by itself doesn’t generate enough to live on.”
Mr Boulding noted the figures from TPR underlined the importance of widening the auto-enrolment catchment rules.
He said: “This was something Theresa May’s government promised for the mid-2020’s, but now we have a new government showing a greater sense of urgency - I’m hoping that date will be brought forward.”
Ian Browne, pensions expert at Quilter, noted that auto-enrolment “will never be perfect and capture all workers into the occupational pension net”.
He said: “It seems we are reaching a stage where auto-enrolment has plateaued and as a policy has reached its limits.
“We need to look at what needs to be done next to ensure we build on what auto-enrolment has achieved and make sure a good retirement for everyone is possible. This includes the self-employed, who have are outside the scope of this policy and dramatically growing in number.”
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