SMEs back low-earning worker pensions - Mitrefinch

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SMEs back low-earning worker pensions

Published: January 13, 2017

Many small businesses would support a change in the regulations to allow low-earning workers to be part of the auto-enrolment pension scheme.

At present, employees who earn below £10,000 per year are excluded from the auto-enrolment scheme, but a study by YouGov reveals small companies would back a change in the legislation.

More than half of those taking part in the poll approved the idea, with 37 per cent revealing they are already paying above the minimum contribution of one per cent for current employees.

Although the current £10,000 threshold is set to stay in place for the foreseeable future, many believe it unfairly impacts on part-time workers and female employees.

Darren Philp, director of policy and market engagement with The People’s Pension, explained: “Small businesses are supportive of lower earners being brought into automatic enrolment.

“Their current exclusion affects part-time workers, more likely to be women, and their inclusion could over time go some way towards tackling some of the inequalities we have in our pensions system.”

Since being launched in 2012, the automatic enrolment pension scheme has seen around seven million workers signed up.

Mitrefinch offers payroll solutions to help companies manage their employee pension scheme.

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