Pension worries for working mums

Some 44% of working mums don’t pay into a pension because they don’t earn enough, according to a  Workingmums.co.uk poll.

Seventeen per cent don’t earn enough in their employed job, 20 per cent are self employed and don’t earn enough and 7% do multiple low paid jobs, often to save on childcare, and don’t earn enough to trigger auto-enrollment for pensions.

The poll comes after analysis of official statistics by mutual insurer Royal London showed the average gap between male and female pension incomes has nearly trebled in 10 years.

From April, workplace pension contributions have increased and there are concerns this could impact those on low wages, leading to more people opting out of the scheme with women likely to be particularly affected since they tend to be concentrated in lower paid jobs. The minimum combined contribution will rise to 5%.

One area of rising concern is the number of people who are missing out of pensions because they do multiple jobs.

A report from Citizens Advice last year showed almost 106,000 working people are not being auto-enrolled into a pension because their earnings come from more than one job and that 70% of them are women.

To qualify for auto-enrolment you need to earn over the  £10,000 a year threshold from a single job.

Citizen Advice found that in total 250,000 had several jobs paying under £10,000 a year- meaning they didn’t qualify for auto-enrolment.

But it said that for two in five of these people the combined income from their jobs exceeds £10,000. However, under current rules they still don’t get auto-enrolled into a pension. Citizens Advice said women were particularly likely to be affected, with 72,000 missing out.

Auto-enrolment has helped over seven million people kick-start a pension and Citizens Advice says the scheme has huge potential to help more people save for a financially secure retirement.

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