UK Investment Guides Loader

400K single mums locked out of workplace pension amid Covid

written by Bella Palmer
pension-amid-covid

New research by NOW: Pension has found that 100,000 more mums have been locked out of the schemes since the start of the pandemic

According to a research, nearly 400,000 single mums are now locked out of a workplace pension scheme due to the pandemic.

Bosses have had to automatically enrol staff into pension schemes since October 2012 to get workers saving for their later years.

However, you must earn at least £10,000 per year from a single employer in order to be automatically enrolled onto the scheme.

Anyone earning less than this can ask to put onto a scheme, but only those who earn over £6,240 will benefit from the top-ups.

New research by NOW: Pension has found that 100,000 more mums have been locked out of the schemes since the start of the pandemic last March.

It means 43% of single mums are now cut off from important pension support – up from 31% a year ago.

It comes as recent lockdowns have made it harder for single mums to work as they juggle homeschooling and household chores on their own.

It's led to an average drop in income of £1,400, according to the research.

It comes as a survey by the Trade Union Congress (TUC) found that 18% of mums have been forced to reduce their working hours due to this.

While nearly 7% were taking unpaid leave from work and receiving no income at all.

When saving into a workplace pension, employers must contribute a minimum of 3% a month into an employee's pension based on their earnings.

This is on top of the 5% an employee contributes to a pension scheme from their wages before tax.

Earlier this month, the pensions minister confirmed that all workers will be automatically enrolled into a scheme by the mid-2020s.

NOW: Pension is calling on the government to axe the £10,000 auto-enrolment threshold and ensure contributions are taken from the first £1 of earnings.

Samantha Gould, head of campaigns at NOW: Pension, said: It is worrying to see that single mothers' ability to save for their futures has been hugely affected by the COVID-19 pandemic.

After what has been a difficult year with women bearing the brunt when it comes to being furloughed and taking on the bulk of childcare responsibilities it is really troubling that even more single mothers have been locked out of pension saving during a time when finances have already been hit, she said.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

You can tell friends this post!