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Horsham CPF Group will be meeting on Monday 25 July at 6:00pm in Gough House.
The meeting will be chaired by our CPF Chairman, David Thompson and is open to all members. Please notify the office using the button below to register your interest.
Briefing papers are available for download at the bottom of this page.
The Challenge
It’s important that everyone has the opportunity and support to find a good job to help them get on in life. That’s why we’re doubling down on our Plan for Jobs with this new campaign to harness the talent of jobseekers and support employers to fill vacancies, find work and create new opportunities. (Rishi Sunak, Chancellor of the Exchequer, 27 January 2022)
Jobs: The Government continues to help more people to start, stay and succeed in work. Through its Way to Work campaign, it met its target to get 500,000 people on Universal Credit into work in the first six months of this year. There are a record number of employees on payrolls, youth unemployment level at a near record low and unemployment at 3.8%. Government has also made work pay by introducing the National Living Wage, increasing the Universal Credit work allowance and cutting the taper rate.
In 2021, there were 5.6 million UK private sector businesses, an increase of over a million since 2010. Government help for small businesses includes funding, guidance and advice. Yet, more needs to be done to help the economy to grow, businesses to fill their vacancies and people across the United Kingdom to cope with the rising costs of living. Most occupation groups in the public sector on average earn more than similarly skilled occupations in the private sector across most firm sizes (see Chart 1).
Pensions: Income from occupational and personal pensions is a relatively important source of pensioner income in the UK, in contrast to most other advanced economies, where state provision (financed either through social insurance contributions or general taxation) is dominant.
The two main types of occupational schemes are Defined Contribution (DC), in which contributions are made to a fund that is invested and used to provide an income in retirement, and Defined Benefit (DB), in which pension benefits are based on salary and length of service. The rollout of automatic enrolment (AE) from 2012 onwards led to a tenfold increase in total membership of DC schemes, from 2.1 million in 2011 to 21 million in 2019. Employers contribute a minimum 3% and employees 5%, part of which includes tax relief.
As a result of auto-enrolment, 79% of all employees participated in a pension in 2021, compared to 47% in 2012 (see Chart 2). Among private sector eligible employees (i.e. those who meet the auto-enrolment age and earnings criteria), participation rose to 86% (14.4 million) in 2021; among public sector eligible employees, participation remained stable at 93% (5.6 million). There is a persistent gap, however, in participation rates among micro (1 to 4 employees) and small (5 to 49 employees) employers in the private sector (57% and 80%, respectively) compared with other sized employers (see Chart 3). As of 2019, public sector employees accounted for 6.3 million out of 7.6 million (87%) of all those actively contributing to a DB pension scheme (see Chart 4).
For employees with a workplace pension, the average value was £10,300 in the private sector compared with £65,400 in the public sector. Employer contributions across the four main public service pension schemes increased to 24.3% in 2019-20.10 The annual cost to the taxpayer of public-sector pensionable payroll totals is about £95 billion.
According to the Association of British insurers, there could be as many as 1.6 million lost pension pots, with a potential aggregate value of around £19.4 billion. In addition, the Government estimates that 850,000 eligible households are not claiming Pension Credit worth £1.7 billion.