Millions of British gig economy workers are missing out on a workplace pension as auto-enrolment bypasses the sector, according to a study released today.
Gig economy workers could boost the size of their pension pot by up to £75,000 if a form of auto-enrolment were extended to cover all workers, according to research by the Pensions Policy Institute for insurance giant Zurich.
The study estimates 5m gig economy workers do not have access to a workplace pension.
Under the 2008 Pensions Act every employer in the UK must put certain staff into a pension scheme and contribute towards it.
Matthew Taylor, who led the Review of Employment Practices in the Modern Economy in July, welcomed the research's findings. He added: "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."
Meanwhile, the CBI head of employment and pensions Matthew Percival said improving pension provision was "key to raising living standards for millions of people".
And Pensions Advisory Service chief executive Michelle Cracknell said: “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.
She continued: "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.”
A spokesperson for the Department for Work and Pensions said: “With over 8 million people now saving into a workplace pension, automatic enrolment continues to be a huge success.
“But there is still more to do and our ongoing review is looking at how we can build upon this ground-breaking policy, including how to meet the needs of the self-employed in saving for a financially secure retirement.”