Pensions blight in UK construction sector, claims union

Fewer than one in four blue-collar construction workers are saving into a workplace retirement plan, according to data that shed new light on the growing pensions crisis facing the self-employed.

Figures obtained from the Department for Work and Pensions show that just 23 per cent of construction workers, including skilled trade occupations and plant and machinery operators, are “participating” in a workplace pension.

About 349,000 blue-collar workers in the sector were signed into the company pension plan, out of 1.5m in total, according to the data. This contrasts with more than 10m employed workers automatically enrolled into a company pension plan since 2012.

“These figures show that the government’s auto-enrolment pension policies are failing construction workers,” said Gail Cartmail, assistant general secretary of the union Unite, which obtained the figures through a Freedom of Information request.

“This failure will result in hundreds of thousands of construction workers being forced into poverty when they retire.”

Roughly half of blue-collar construction workers are officially registered as self-employed and therefore not eligible for auto-enrolment, according to Unite.

“Until rampant casualisation and bogus self-employment are tackled in the construction industry, workers are not going to be eligible or prepared to register for a workplace pension,” said Ms Cartmail.

The latest evidence of the growing gap in pension participation between self-employed and employed workers came after the OECD said governments should reform their pension systems to ensure workers in temporary or part-time employment are at less risk of poverty in retirement.

Non-standard employment, such as self-employment, temporary or part-time work, now accounts for more than one-third of employment across OECD countries. 

In the UK, recent data found that just 37 per cent of self-employed people aged 40 to 59 were saving into a private pension, compared with 79 per cent of employees.

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“Governments need to quickly put in place more inclusive and harmonised pensions for all,” said Ángel Gurría, secretary-general of the OECD.

“Reforming pension policies in OECD countries to reduce gaps between standard and non-standard workers in terms of coverage, contributions and entitlements is essential.”

In response, the DWP said a record 671,000 eligible construction workers were now saving into workplace pensions, up from 232,000 five years ago. These figures include blue- and white-collar workers.

“Almost four in five (79 per cent) eligible private sector construction industry workers were saving in workplace pensions in 2018,” the DWP said.

“Since 2012 more than 10m people have been automatically enrolled into workplace pensions.”



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