A new report has revealed that millions of British workers in the gig economy are missing out on a workplace pension as auto enrolment bypasses this sector. The report, says that a shake-up is needed to reduce the risk of a gig economy long-term pension savings crisis, and expanding auto enrolment into the sector is the way to do this.
Gig economy workers are a rapidly expanding section of the UK workforce, and their numbers are thought to now exceed five million people, ranging from those people who are described as self-employed to those on agency and zero-hour contracts.
Chris Atkinson of Zurich who carried out the research said:
"The gig economy has rapidly brought about a redefinition of the contracts between employers and employees."
"However, there is a blind spot in the current pension system. Gig economy workers don't have access to a workplace pension, meaning millions aren't saving enough for retirement."
"The reality is that many gig workers may have to work far longer than even traditional employees before they can retire."
Matthew Taylor, who led the Review of Employment Practices in the Modern Economy in July, welcomed the research's findings. He said:
"Gig work has many benefits for workers and consumers but we need the right regulatory framework to protect workers and meet wider public policy goals."
Pensions Advisory Service chief executive said that the lack of people from the gig economy asking for their advice suggests very few of them have a workplace pension.
"The proportion of our customers that are working in the gig economy is small, probably due to the lack of signposting. This is a worry as these people do not have the support of a workplace and do not have the luxury of a pension scheme being set up for them."
"Those that do contact us fall into the profiles of '45-year-old who counts herself as self-employed' and '58-year old approaching retirement' and have previously been in an employed position so are used to the concept of part of their learning going towards saving for their retirement."
"Understandably, gig economy workers have the pressures of ensuring that their immediate financial requirements are met. Yet the need for everyone to take responsibility for their retirement income is the same."
Expanding the scope of auto enrolment to include the self-employed is currently thought to be one of the options the government are considering in their review that is ongoing.