There have been increasing concerns over recent years that the UK construction sector is walking headlong into a pension’s time bomb and sadly the latest figures do nothing to dispel these fears.
According to figures from the Department for Work and Pensions approximately only 349,000 blue-collar construction workers, out of 1.5m in total, are saving into a workplace pension.
That’s fewer than one in four and although these figures are an improvement on previous years, which is a good thing, by contrast, just 37% of self-employed people aged 40 to 59 are saving into a private pension, compared with 79% of employees.
This, industry insiders say, clearly highlights the growing pensions crisis facing the self-employed and as a direct result, the construction industry.
Why? Because roughly half of blue-collar construction workers are officially registered as self-employed and therefore not eligible for auto-enrolment, according to union Unite.
The news comes not long after a recent report on pensions from the Department of Work and Pensions, laying out its approach to increasing pension participation for self-employed workers, was heavily criticised as not being enough to tackle the growing problem.
Previous plans to extend auto-enrolment for the self-employed have been abolished and replaced with plans to trial new marketing strategies to encourage saving to tackle the wrong. Not enough said the industry.
The Organisation for Economic Co-operation and Development (OECD) has also called for reforms to the pension system to ensure workers in non-standard employment, such as self-employed, do not continue to see a growing gap in pension participation between themselves and employed workers, leaving them at a higher risk of poverty in retirement.
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