[2021] Motion 30 Auto-enrolment and the lowest paid

carried motion
Carried motion

Received from:

Congress acknowledges that a major incentive for workers to save for retirement is the tax relief they receive on their pension contributions. Everyone who saves into a pension is entitled to a government ‘top-up’ of at least 20 per cent, whether they are a taxpayer or not. However, due to a tax loophole, thousands of the lowest paid workers are not benefitting from this. Non-taxpayers in a Net Pay Scheme don’t and they miss out on the government top-up. Industry experts have highlighted this injustice to the UK government, but it has done nothing to address it. The government continues to encourage the lowest paid to save for their retirement while denying them tax incentives.

Congress also argues that the pressure needs to be kept on government to make sure that auto-enrolment makes pensions open to all. There are an estimated 4.8 million low-income workers excluded from auto-enrolment as they earn less than £10,000 a year, the auto-enrolment trigger. Many work part-time and have more than one job, which means their total income is more than £10,000.

However, they miss out on an employer pension contribution because of the way the pension rules work. Congress calls on the TUC to campaign to stop the low-paid falling through the cracks of auto-enrolment by developing it in a way that helps low earners save for a decent retirement. This means bringing together low-income multiple jobs for the purpose of automatic enrolment.