More than a million of us left behind by the pensions revolution already

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More than a million people are missing out on the benefits of workplace pensions.

It has always been the position of everyone at Lovemoney that workplace pensions, also known as auto-enrolment, are unquestionably a good thing.

As a nation we don't save anywhere near enough for retirement, so compelling employers to place workers into pension schemes and contribute to a pension pot, alongside contributions from the workers themselves, is an excellent way to change that.

And the fears that people would choose to opt-out once they realised a chunk of their salary was disappearing each month don't seem to be coming to fruition. A number of firms, as well as the pensions minister, have reported opt-out rates of less than 10%.

However, while many workers are now auto-enrolled, a far larger number are being left behind.

The workers who aren't being auto-enrolled
Figures from the Pensions Regulator show that one million workers, employed by 1,153 of our biggest companies, have been auto-enrolled into pension schemes so far. But 1.7 million employees of those same companies have been left behind as they don't qualify.

This may be for one of three reasons. Firstly, they may be over state pension age, in which case it's too late for auto enrolment to make much difference. Or they may be under 22, the minimum age for workplace pensions.

The third group excluded are those earning less than £9,400, the minimum salary threshold.

Investment provider Hargreaves Lansdown has expressed particular concern about this group, suggesting that part-time workers – who are the ones falling below that salary threshold – will get left behind, leaving them with insufficient pension pots when the time comes.

It's not like they can't actually get involved either – so long as you earn over £5,668, you can opt in. But the responsibility is yours, unlike those earning over £9,400, who can rely on their employer to do the work for them.
Why this is a problem
The majority of part-time workers are women, who already don't tend to save enough for retirement. Letting them slip through the cracks of auto-enrolment could cause serious problems.

Of course, part-time workers come in different shapes and sizes. While some work part-time out of necessity, sometimes taking on a number of different part-time jobs at once, others choose to do so as they can afford to. This latter group is perhaps not such a concern – they may be able to rely on the pension of their partner in later years anyway, combined with their own State Pension entitlements.

But there are plenty of part-time workers who need every penny of help they can get, and need to be encouraged to join in with auto-enrolment.

Left behind before they've even begun
There's another group of employees that also concern me when it comes to workplace pensions – those who work for small companies.

Maybe that's because I am one. But the phased introduction of workplace pensions – where the largest employers are the first to have to take part, followed by medium sized employers, and so on – means that millions of workers are missing out on valuable contributions to their pension pot, simply because of who they work for.

If you work for a company with fewer than 30 employees, the start date for your auto-enrolment can vary between June 2015 and April 2017, depending on your employer's PAYE reference number.

That's almost four years away. And a gap like that can make a massive difference to your final pension pot.

To see when different-sized employers are required to begin auto-enrolment, check out the Pensions Regulator's website.

I understand why workplace pensions are being phased in this way – it's easier to do things in stages like this, rather than everyone all at once. And starting with the bigger firms makes sense. After all, that way you get more people involved as early as possible. But it's still hugely disappointing that, with the system seemingly working fine at the moment, some workers will have to wait such a long time before they benefit.

What do you think? Is it a concern that so many people are still excluded from workplace pensions? Do you plan to opt out? Let us know your thoughts in the Comments box below.

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