Under pensions auto-enrolment, which started for staff in big companies earlier this month, employers and employees will pay contributions on earnings above £5,564, but only if staff earn above £8,105. Trade Union Congress (TUC) claims the Government is consulting on raising the lower earnings limit and the earnings trigger to £5,720 and £9,205 respectively.
The TUC submission to the Government's review of auto enrolment thresholds for 2013/14 warns that raising the earnings trigger for auto-enrolment would cause hundreds of thousands of low-paid workers to miss out, unless they voluntarily sign up to the scheme.
TUC analysis of data from the Annual Survey of Hours and Earnings, published in September 2012 by Office for National Statistics (ONS) shows that around 3.5 million workers earn less than £8,106 a year, and would therefore not be automatically enrolled into a workplace pension.
It claims raising this trigger to £9,205 next April would mean a further 585,000 staff will fall below the earnings trigger. Of those workers set to miss out on auto-enrolment if the earnings trigger is raised, 457,000 (80%) are female and 506,000 (86%) are part-time workers.
Low-paid women and part-time workers are the least likely to be saving into a workplace pension and should be a core target for auto-enrolment, not the focus of those excluded from it, says the TUC.
TUC general secretary Brendan Barber said: "It's great to see pension auto-enrolment finally starting.
"With two-thirds of employees no longer saving into a workplace pension, auto-enrolment cannot come soon enough if we are to start tackling the UK's growing pensioner poverty crisis."
Barber added: "It's disappointing therefore to see that over half a million low-paid workers could soon be missing out. Women and part-time workers are the least likely to save into a pension. They should be a core target for auto-enrolment, not the main losers from Government plans to restrict access to the scheme.
"The Government should show it is fully committed to auto-enrolment by ensuring that as many people as possible are eligible to be enrolled into saving for a pension."
