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Pension auto-enrolment is not helping the lowest earners in society, mainly women who are working part time or have taken a career break to look after family, says Portal Financial, one of the UK’s largest income drawdown advisers.
It highlights recent figures from a Pensions Advisory Service report earlier this year which show almost three-quarters of people in part-time work and 63% of those earning £7 or less an hour are women.
The earnings threshold to be automatically included in auto-enrolment is £10,000, which Portal Financial says excludes many people in low-paid and part-time work. The Pensions Advisory Service report shows over three-quarters of women do not think they will be financially comfortable in retirement, and 71% are not confident in making decisions about retirement saving, which shows auto-enrolment is not helping those most in need.
Jamie Smith-Thompson, managing director of Portal Financial, said: “Auto-enrolment is helping millions of people who otherwise would have had no pension provisions, but much more needs to be done to protect women. There was a time when they were able to rely on their husband’s pensions because they had been at-home mums, but with half of marriages ending in divorce and more women working, this is no longer an option.”