2 million ‘multi-jobbers’ missing out on auto enrolment

11 June 2018

A recent report from Scottish Widows shows that nearly two million ‘multi-jobbers’ – people with more than one job – are missing out on over £90 million a year in employer contributions because of the policy on auto enrolment thresholds.

Scottish Widows’ 14th annual Retirement Report focuses on the impact auto-enrolment has had on the nation’s savings habits – is the initiative helping more people to save enough for the retirement they want?

The research highlights the issue that the £10,000 auto-enrolment threshold for earnings causes for the group of workers with more than one job whose total earnings may exceed the threshold, but do not with an individual employer.

Multi-jobbers, who are often working full-time hours, are unfairly missing out on pension contributions for their overall earnings due to their income being split across different employers, thus falling foul of minimum earnings threshold for enrolment.

Scottish Widows projections, using the latest ONS figures, show that 1,831,127 multi-jobbers have at least one job that earns under £10,000 and is not enrolled in the company’s pension scheme. Based on the average salary from these jobs, collectively over £90 million of employer contributions a year could be claimed if the auto-enrolment threshold was scrapped.


CIPP comment

In December 2017 the The Department for Work and Pensions (DWP) published their analytical report which set out the analysis and findings used to inform the Automatic enrolment review 2017. Two major proposals were in this report

  1. Remove the lower earnings limit (LEL)
  2. Change the lower age limit to 18

The analytical report states that it is the government’s ambition to implement the proposed changes to the framework in the mid-2020s. This will be subject to discussions with stakeholders around the detailed design in 2018/19, finding ways to make the changes affordable, and followed in due course by formal consultation (which the CIPP Policy team will of course be a part of) with a view to introducing legislation.

The proposals would help to address the barriers faced by ‘multi-jobbers’ as it would mean that those who earn below the current LEL in any of their employments could choose to opt in and would automatically be entitled to employer contributions. Those earning above the earnings trigger in one or more of their jobs would be entitled to increased employer contributions (from £1).