On the go: The majority of construction workers are not saving towards their retirement, according to research by union Unite.
Following a freedom of information request to the Department of Work and Pensions, the government revealed that 797,000 employees in the construction sector are paying into a pension of any form.
There are around 1.5m employed construction workers and 712,000 self-employed, according to Office for National Statistics figures.
According to Unite, only 36 per cent of the construction workforce is known to be paying into a pension. As this is a figure for the entire construction industry, the percentage of blue-collar construction workers contributing to a pension is expected to be lower, the union added.
Therefore, the number of self-employed workers paying into a pension is likely to be very low. Even if they set up a private pension, as they do not receive any employer contributions, it is very unlikely that any pension savings a self-employed worker makes will prevent poverty in retirement, Unite stated.
The DWP had announced that it would work on improving pension participation and retirement outcomes among self-employed people by testing a number of different approaches in its auto-enrolment review in December 2017.
A year later, the government launched a paper on self-employed retirement savings, where it announced that it was exploring invoicing and accounting systems to enable automatic pension contributions from the self-employed.
However, no solutions have been made so far, with several trials being implemented through the government-backed master trust Nest.
Jerry Swain, Unite’s national officer for construction, 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.
“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.”
Swain added that the government needs to take action to begin plugging the black hole in construction pension saving. After a lifetime of “hard manual work, the ultimate ignominy for construction workers is to face poverty in retirement”, he said.
“Put simply, construction workers deserve better.”
