NEWS RELEASE
Friday 13 August 2004
STUC FEARS SCOTTISH LOW PAID WORKERS DISADVANTAGED OVER STAKEHOLDER PROVISION
The STUC has expressed concern on the ability of Scottish workers to make adequate provision for income in retirement following the release of TUC analysis of statistics issued by the Inland Revenue outlining the take up of stakeholder pensions and, for the first time, detailed information on contributions made by workers and other groups, including employers.
Ian Tasker, STUC Assistant Secretary said;
"As we suspected these figures indicate that, as a vehicle to encourage those on low pay to save for retirement, stakeholder pensions are failing. The analysis issued by the TUC today clearly indicate that workers earning over £20,000 per year are contributing more to stakeholder pensions.
"Of even greater concern to the STUC is the disparity that exists between lower paid workers in Scotland compared to the United Kingdom nationally. Figures received from the Scottish Low Pay Unit indicate that 35.1% of the Scottish workforce earns less than the low pay threshold compared to 21.5% nationally. This will undoubtedly have an impact on the ability to make contributions on a level that will provide a significant income in retirement".
"Unless employers are compelled to make contributions to the pensions of low paid workers the stakeholder pension will continue to be used as a tax efficient savings vehicle for higher earners making provision for unemployed spouses and children. The figures clearly show that the unemployed make contributions at higher levels than workers earning in excess of £30,000 and the contributions from the unemployed may include the spouses of those higher earners".
ENDS
For Further information contact:
Ian Tasker, STUC Health and Safety Officer
Tel: 0141 337 8100 / Fax: 0141 337 8101 / Email: info@stuc.org.uk
Notes to editors:
Stakeholder contributions analysis
- By age and gender
Numbers Contributing Age Female Male Total
15 and under 10,000 10,000 20,000 16 - 24 30,000 80,000 110,000 25 - 34 80,000 160,000 240,000 35 - 44 70,000 150,000 220,000 45 - 54 60,000 110,000 170,000 55 - 65 20,000 60,000 80,000 65 and over 0 0
Total 270,000 570,000 840,000
- By income
Employees - Number Average Approx % Potential Income range Cont Cont Earnings* S/fall £0 - £10,000 170,000 £510 10.2% £240 £10,000 - £20,000 300,000 £520 3.5% £1,725 £20,000 - £30,000 150,000 £680 2.7% £3,075 £30,000 and over 60,000 £2,370 6.8% £2,780
Employees Total 680,000 £720 2.9%*** £3,025
Self-employed
£0 - £10,000 30,000 £910 £10,000 - £20,000 30,000 £850 £20,000 - £30,000 10,000 £1,530 £30,000 and over 20,000 £6,110
Self-employed Total 90,000 £2,010
Other Groups
In receipt of pension 10,000 £2,740 Child 20,000 £1,320 Full-time education £1,730 Carer £1,570 Unemployed 10,000 £2,620 Other 20,000 £1,590
Other Groups Total 60,000 £1,928
Overall Total 840,000 £950 (employees, self-employed and others combined)
- Earnings figures used for the various earnings ranges are - £5000, £15000, £25000 and £35000. ** How far short the contribution is of 15% of earnings. *** Assumes the average wage is £25000.