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Multi-jobbers – listen up!

Workers on lower salaries with more than one job are at risk of a poorer retirement, as they miss out on employer pension contributions, a new study has concluded.*

Excluded from auto enrolment Auto enrolment was introduced to encourage people to save more in their pensions during their working years. Under the scheme, employers are required to open a pension and make contributions on their employees’ behalf, unless an employee opts out of contributing. Employees need to earn at least £10,000 a year to be automatically enrolled into a workplace scheme. At present, the total minimum contribution is 8%, with employers contributing a minimum of 3%.

If multi-jobbers earn under £10,000 a year in each job they hold, the issue becomes apparent. It is estimated that this could affect more than four million people in the UK.

Threshold confusion

Interestingly, many workers are unaware that if they have qualifying earnings above £6,240, they can choose to opt in to their company’s pension scheme, with the employer legally required to contribute at a rate of 3% of their salary. Those earning under £6,240 can still opt into their company pension, but their employer is not required to contribute. Worryingly, the study found that around one in 20 multi-jobbers, with at least one job paying under the £10,000 threshold, say they have been refused entry into a company
pension by their bosses.

*Scottish Widows, 2021