A freedom of information request made by Unite, the UK and Ireland’s largest union, has revealed that the government’s pension policy is failing construction workers, with fewer than one in four regularly paying into a workplace pension.
The figures obtained from the Department of Work and Pensions (DWP) show that just 23% of blue collar construction workers are “participating in a workplace pension”.
A breakdown of the figures reveals that the Office of National Statistics (ONS) estimates that 1.5 million workers are employed in blue collar construction work. The DWPs figures show that just 349,000 blue collar construction workers (skilled trade occupations, elementary occupations, plant and machine operatives) are paying into a pension.
The paucity of construction workers paying into a pension is a major failure of the government’s auto-enrolment pension scheme, which was designed to ensure that all employees pay into a workplace pension.
The revelation that the majority of blue collar construction workers don’t have a pension is likely to result in them facing poverty in retirement.
Unite assistant general secretary Gail Cartmail said: “These figures show that the government’s auto enrolment pension policies are failing construction workers.
“This failure will result in hundreds of thousands of construction workers being forced into poverty when they retire.
Factors that result in construction workers not having a pension include:
- rampant bogus self-employment with roughly half of blue collar construction workers being officially registered as self-employed and therefore not eligible for the auto-enrolment scheme;
- the extensive use of umbrella companies where workers are required to contribute both employers’ and employees’ pension contributions making them unaffordable for many;
- short-term engagements that result in workers believing it is not worth making pension contributions;
- construction employers’ hostility to paying pension contributions.
Cartmail said that rather than tackle the factors that “make it difficult or impossible for construction workers to contribute to the auto-enrolment pension regime, the government has acted like an ostrich and chosen to ignore the problem”.
She added that “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.”