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Auto-enrolment doesn't provide 'decent' income for low-paid workers, says TUC

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The government is ignoring the fact that employees on a low income will not earn enough to live comfortably in retirement, according to TUC general-secretary Frances O'Grady.

O'Grady was responding to figures released by The Pensions Regulator (TPR) that revealed more than 4 million UK employees have now been automatically enrolled onto workplace pension schemes.

Around 21,000 employers have now complied since the launch of the programme in 2012. TPR executive director of auto-enrolment Charles Counsell called the figures evidence that auto-enrolment is "gradually becoming part of the fabric" in workplaces across the country.

Pensions minister Steve Webb added that pensions are now "becoming the norm" for all employees.

"Four million people have now been automatically enrolled into a workplace pension with many more saving for their retirement for the first time or saving more as a result," he said.

But O'Grady accused the minister of failing to act on the lack of security for low-paid workers.

"Many people in low-paid jobs don’t benefit from the current system because they have to be earning more than £10,000 to trigger auto-enrolment," she said.

“The pensions minister recognises that auto-enrolment pensions will not generate a decent retirement income, even with plans to raise minimum contributions in 2017 and 2018," she added.

"We need the government to set out a new road map to improve the scheme and ensure that it’s fully supported by sufficient employer contributions.”