Gig workers missing out on up to £75,000 in pension savings

posted by 4 years ago in News

Five million gig workers in the UK are without access to workplace benefits, including pensions according to data published in a new ‘Restless Workplace’ report.

The study, commissioned by Zurich with The Pensions Policy Institute, is the first of its kind into the impact of the gig economy on workplace benefits.

The UK gig economy includes five million people, ranging from those who class themselves as self-employed through to 800,000 on zero-hour or agency contracts. Of the current UK workforce of 32 million workers, this means one in six is currently a gig worker – with no, or restricted access to workplace benefits – including pension saving – placing millions at risk of financial hardship.

Zurich say a shake-up is needed to reduce the risk of a long-term savings crisis within the gig economy. This would include expanding automatic enrolment into workplace pensions. There are also calls for more financial education from gig companies to increase awareness among workers of existing savings and protection products.

Chris Atkinson at Zurich UK, said:

“The gig economy has rapidly brought about a redefinition of the contracts between employers and employees. However, there is a blind spot in the current pension system. Gig economy workers don’t have access to a workplace pension, meaning millions aren’t saving enough for retirement. It’s time our nineteenth century welfare system was overhauled for the 21st century world of work.

“Using tax returns to extend auto-enrolment to the gig economy would be a step in the right direction, but it’s no silver bullet and, on its own, is still unlikely to give individuals a big enough pot in retirement.  The reality is that many gig workers may have to work far longer than even traditional employees before they can retire. This will be at a time when they are more vulnerable to financial shocks from ill health – or may find it harder to get a job in the first place. As well as saving more of their income earlier in life, it’s vital gig workers ensure they have a financial cushion in place should the unexpected happen.”