Prospect’s Senior Deputy General Secretary Sue Ferns gives evidence at Work and Pensions Select Committee
This morning, Prospect’s Senior Deputy General Secretary Sue Ferns gave evidence to the Work and Pensions Select Committee, for their second oral evidence session inquiry on saving for later life.
Prospect was invited to give evidence following our written submission to the Committee’s inquiry ‘Protecting pension savers – five years on from the pension freedoms: Saving for later life’. Sue spoke alongside Christopher Brooks, Head of Policy at Age UK; Nigel Stanley, Chair of NEST Members’ Panel, and Sophia Dimitriadis, Senior Economist at International Longevity Centre. As the only witness from a trade union, Sue’s evidence represented the voice of working people on the issue.
Sue stated Prospect’s support for auto-enrolment and implementation from the mid-2020s, as well as support for reducing the qualifying age for auto-enrolment to 18, which will bring more than 100,000 people into auto enrolment. There are limitations on the amount that young people can save due to the cost-of-living crisis, yet 82% of young people in work believe that pension saving should start before the age of 22. The longer that people must save, the less of a burden it becomes, and lowering the threshold would prepare young people for the process.
Senior Deputy General Secretary Sue Ferns said:
“There is a case for a new Pensions Commission to set the pace on pensions policy for the decade ahead because the truth of the matter is we’ve gone from a situation where millions of workers had no occupational pension, to one now where millions of workers have an inadequate occupational pension.
“This is not just a matter of tweaking existing arrangements but requires some fundamental action, otherwise we will continue to have this problem of inadequate pension saving for generations to come.”
Sue’s evidence discussed how a new Pension Commission should have a particular focus on pensions provisions for the self-employed, which Prospect have identified as a major issue. Participation in pensions for the self-employed is now lower than it was in 1998. Just 16% of self-employed workers save for retirement, compared to 88% of the rest of the working population. This problem requires bold and radical policies, such as a new Pension Commission, to address the issue.
Another key issue of concern is the gender pension gap, a key component of inequality in society. Research by Prospect shows that the gender pensions gap is more than twice the level of the gender pay gap, and its relatively low profile means that most women are unaware of this discrepancy until they reach retirement.
Additionally, those earning below the £10,000 minimum rate for auto-enrolment are overwhelmingly women who are working part time jobs due to caring responsibilities either for children or for sick relatives, who aren’t getting sufficient credit through the pension system for caring responsibilities
The gender pension gap is barely even on the national agenda, and Prospect believes that the government must set official objectives to address the issue. Read more about Prospect’s roadmap to tackle the gender pensions gap.