Menu
13/08/2004
Stakeholder pensions are failing low-pay workers, TUC claim
Low paid workers are not getting the benefit of stakeholder pensions as employers are not contributing enough to make any headway in staving off Britain's looming pensions crisis, the Trades Union Congress (TUC) has claimed.
The TUC also claimed that the well-off were "hijacking" stakeholder policies, created to help the lower paid worker, as a "tax dodge".
TUC-backed research found that the average contribution to an employee’s stakeholder pension was just £720 a year – including employee and employer contributions. However, many children or spouses of the well-off have been taking advantage of stakeholder tax breaks to make contributions into plans averaging nearly £2,000.
Anyone under 75 and not earning more than £30,000 a year can take out a stakeholder pension and attract full tax advantages. The wealthy can therefore provide stakeholder pensions for any non or low earners in their family - such as children, students and non-working spouses - and attract considerable tax advantages, the TUC said.
New analysis of Inland Revenue statistics by the TUC shows the different contributions made by employees and other groups. Up to now only a figure for the overall average contribution to all stakeholders of about £1,000 a year had been available.
The new analysis also reveals that only 680,000 employees are contributing to a stakeholder pension - 2.6% of the employed workforce.
"As many of these will be top-up pensions held in addition to an occupational pension, this is further evidence of the failure of stakeholder pensions with no employer contribution to encourage the take up of pensions by the lower paid," the TUC said.
General Secretary Brendan Barber added: "These figures show that stakeholder pensions are a bigger failure than we thought. They were meant to get the low paid saving, but few have been taken up, and, as these figures show, contributions to employees’ stakeholder pensions are even lower than previously estimated.
He added: "There is nothing wrong with stakeholder pensions in principle, but we now know conclusively that without an employer contribution they will make little or no impact on our pensions crisis. On the other hand they are clearly a good way for the wealthy to avoid paying tax.'"
(gmcg)
The TUC also claimed that the well-off were "hijacking" stakeholder policies, created to help the lower paid worker, as a "tax dodge".
TUC-backed research found that the average contribution to an employee’s stakeholder pension was just £720 a year – including employee and employer contributions. However, many children or spouses of the well-off have been taking advantage of stakeholder tax breaks to make contributions into plans averaging nearly £2,000.
Anyone under 75 and not earning more than £30,000 a year can take out a stakeholder pension and attract full tax advantages. The wealthy can therefore provide stakeholder pensions for any non or low earners in their family - such as children, students and non-working spouses - and attract considerable tax advantages, the TUC said.
New analysis of Inland Revenue statistics by the TUC shows the different contributions made by employees and other groups. Up to now only a figure for the overall average contribution to all stakeholders of about £1,000 a year had been available.
The new analysis also reveals that only 680,000 employees are contributing to a stakeholder pension - 2.6% of the employed workforce.
"As many of these will be top-up pensions held in addition to an occupational pension, this is further evidence of the failure of stakeholder pensions with no employer contribution to encourage the take up of pensions by the lower paid," the TUC said.
General Secretary Brendan Barber added: "These figures show that stakeholder pensions are a bigger failure than we thought. They were meant to get the low paid saving, but few have been taken up, and, as these figures show, contributions to employees’ stakeholder pensions are even lower than previously estimated.
He added: "There is nothing wrong with stakeholder pensions in principle, but we now know conclusively that without an employer contribution they will make little or no impact on our pensions crisis. On the other hand they are clearly a good way for the wealthy to avoid paying tax.'"
(gmcg)
Related UK National News Stories
Click here for the latest headlines.
29 July 2003
Majority of people have scant knowledge of pensions
Research published today by the Department for Work and Pensions suggests that around half the population has little or no knowledge of pension provision. The research looked at private pension provision among people of working age in Britain and collected information on people's attitudes towards pensions and saving for retirement.
Majority of people have scant knowledge of pensions
Research published today by the Department for Work and Pensions suggests that around half the population has little or no knowledge of pension provision. The research looked at private pension provision among people of working age in Britain and collected information on people's attitudes towards pensions and saving for retirement.
07 September 2004
Pensions Secretary quits government
The Work and Pensions Secretary Andrew Smith has resigned from the Cabinet, saying he quit in order to commit more time to his constituency and spend more time with his family.
Pensions Secretary quits government
The Work and Pensions Secretary Andrew Smith has resigned from the Cabinet, saying he quit in order to commit more time to his constituency and spend more time with his family.
25 August 2003
Government urged to better promote pensions take-up
The Association of British Insurers (ABI) has called on the government to help employers promote stakeholder pensions take-up. According to research from the ABI, 82% of employer-sponsored stakeholder pension schemes remain ‘empty boxes’ with no pensions yet active.
Government urged to better promote pensions take-up
The Association of British Insurers (ABI) has called on the government to help employers promote stakeholder pensions take-up. According to research from the ABI, 82% of employer-sponsored stakeholder pension schemes remain ‘empty boxes’ with no pensions yet active.
24 November 2005
TUC raps bosses 'luxury' pensions
The TUC has rapped the top rate pensions paid to company directors, while workers are asked to work longer for smaller pensions. A TUC report claimed that 8 out of 10 of the UK's top companies provide directors with pensions that can pay out in full at 60 and are worth, on average, 26 times those of most employees.
TUC raps bosses 'luxury' pensions
The TUC has rapped the top rate pensions paid to company directors, while workers are asked to work longer for smaller pensions. A TUC report claimed that 8 out of 10 of the UK's top companies provide directors with pensions that can pay out in full at 60 and are worth, on average, 26 times those of most employees.
11 June 2004
Changes needed to alleviate 'pensions crisis', says TUC
Large numbers of young people face poverty in retirement unless big changes are made to pensions law and young people wake up to their pensions plight, the TUC has warned today.
Changes needed to alleviate 'pensions crisis', says TUC
Large numbers of young people face poverty in retirement unless big changes are made to pensions law and young people wake up to their pensions plight, the TUC has warned today.
-
Northern Ireland WeatherToday:A showery start with outbreaks most frequent north of Lough Neagh and through the morning, before dwindling during the afternoon as the northwest breezes ease and brighter spells of weak sunshine prosper. Maximum temperature 8 °C.Tonight:A dry night, save for a few light showers around the coasts, with prolonged clear spells and light winds bringing a frosty dawn for many in central and southern parts. Minimum temperature -3 °C.
