The majority of construction workers are not saving anything towards retirement, construction union Unite has claimed.
Unite said that a Freedom of Information request it made to the Department of Work and Pensions showed that 797,000 construction workers are paying into some form of pension, out of a total workforce of 2.2m.
Unite calculated that just 36% of the workforce is known to have been paying into a pension, with the number of self-employed workers, of which there are 712,000, paying into a pension likely to be “very low”.
Unite blamed a series of factors for workers not paying into pensions, including: “bogus self-employment” with around half of blue collar construction workers being officially registered as self-employed and therefore not eligible for the auto-enrolment scheme; the use of umbrella companies where workers are required to contribute both employers’ and employees’ pension contributions, making them unaffordable for many; short-term work engagements; what it termed employers’ “hostility” to paying pension contributions; and the low level of pay for unskilled workers
The government is due to trial using financial digital platforms to encourage the self-employed to save towards their pensions.
Unite national officer for construction Jerry Swain said: “These figures are deeply troubling. With the majority of construction workers not saving for retirement, we are creating a destitute generation of future pensioners.
“Even if workers are saving towards a pension, there is no guarantee that they are saving sufficient amounts to prevent poverty in retirement.
“The way that construction is organised, with short-term engagements, rampant bogus self-employment and nefarious schemes such as umbrella companies, it is incredibly difficult for construction workers to have confidence in their continued employment so as to allow them to consistently pay into a pension scheme.
“The government needs to take urgent action to begin plugging this black hole in construction pension saving, the consequences of not doing so do not bear thinking about.”