Construction workers are facing a "retirement black hole" as a freedom of information (FOI) request has revealed that 64 per cent are not saving into a pension.

The FOI request from the trade union, Unite, showed that the government estimated around 797,000 workers in the construction sector are paying into a pension.

This represents 36 per cent of the 1.5 million employees and 712,000 self-employed workers in the industry.

Unite stated that as this figure is for the entire construction industry, the percentage of blue collar construction workers contributing to a pension is expected to be “considerably lower”.

In its FOI response, the government said that it was aiming to commence the next stage of its trials using financial digital platforms to encourage the self-employed to save into pensions this summer.

Unite said that one of the factors that is resulting in construction workers not having a pension was “rampant bogus self-employment”, with roughly half of blue collar construction workers being officially registered as self-employed and therefore not eligible for auto-enrolment.

The union also pointed to the “extensive” use of umbrella companies, where workers are required to contribute both employers’ and employees’ pension contributions, which makes them unaffordable for many, and short-term engagements that result in workers thinking it is not worth making contributions.

Further factors, according to Unite, included construction workers’ hostility to paying into a pension and the low level of pay for unskilled workers.

Commenting on the findings, Unite national officer for construction, Jerry Swain, said: “These figures are deeply troubling. With the majority of construction workers not saving for retirement, we are creating a destitute generation of future pensioners.
 
“Even if workers are saving towards a pension, there is no guarantee that they are saving sufficient amounts to prevent poverty in retirement.
 
“The way that construction is organised, with short-term engagements, rampant bogus self-employment and nefarious schemes such as umbrella companies, it is incredibly difficult for construction workers to have confidence in their continued employment so as to allow them to consistently pay into a pension scheme.
 
“The government needs to take urgent action to begin plugging this black hole in construction pension saving, the consequences of not doing so do not bare thinking about.
 
“After a lifetime of hard manual work the ultimate ignominy for construction workers is to face poverty in retirement. Put simply, construction workers deserve better."

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