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50,000 Part-timers could lose out on personal accounts

Around 50,000 people could miss out on pension personal accounts because they have multiple earnings below the £5,000 threshold for auto-enrolment.

At a Pensions Bill committee evidence session last week, Personal Accounts Delivery Authority chairman Paul Myners said he was concerned that part-time workers with multiple employers will not be auto-enrolled into personal accounts because they do not earn above £5,000 with any individual employer.

Standard Life marketing technical manager Andy Tully estimates there are around 40,000 to 50,000 people who have more than one job and could be affected.

He says: “Although these employees could still opt into personal accounts, they will not get any employer contributions, but these are the very people that personal accounts are supposed to help.”

Pada chief executive Tim Jones told the committee he was looking to address the issue.

Tully also warns there may be too much choice on investment funds offered by the scheme. Previously, the Government and Pada have said that the number of funds available would be in the region of four or five.

But during the evidence session, Jones said: “To set expectations, our conversations so far are about maybe getting funds into double figures – six, 10 or 15 – but not 50, 100 or 150.”

Tully says: “This is well above what was previously said and is getting quite a lot for a non-advised product. Generic advice will not go into that level of detail.”

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