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Pension changes are on the horizon

The Pension Regulator is calling for Gig Economy employers to take action in recognising that their workers are eligible for pension provisions.

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Following the Supreme Court judgment on Uber, workers now benefit from some statutory employment rights, including for many, the right to be automatically enrolled in a pension scheme. Auto-enrolment is about helping people to have a decent standard of living during retirement. It is not only a legal obligation to auto-enrol those workers who are eligible jobholders, but also a moral obligation for gig economy employers to engage with auto-enrolment to help their workforce save for their retirement.

The less traditional working practices of gig economy workers such as flexible hours, zero-hour contracts and multiple sources of income create practical challenges for assessing whether a worker meets the qualifying earnings trigger and bands for auto-enrolment. There is hope on the horizon that this process will become easier. The Department for Work and Pensions is aiming to abolish the lower earnings limit and reduce the age for automatic enrolment from age 22 to 18. This is expected in the mid-2020s.

This is positive news that aims to help more people save for their retirement and increase access to auto-enrolment. All employers (whether in the gig economy or otherwise) should keep an eye out for future changes in the law.

If you are a gig economy employer you also need to be aware that workers are entitled to certain statutory rights including holiday pay and national minimum wage and do now have greater protection in terms of discrimination.

It is incredibly important that every pension saver thinks about the adequacy of their own retirement provision so that they don't risk reaching retirement having not saved anywhere near enough to live comfortably. Your moral obligations as an employer are to support your workers in achieving this.

Should you have any questions regarding your liabilities please speak to us.


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