Number of single working mums 'locked out' of AE increases by a third

Nearly half (43 per cent) of working single mums, around 400,000 women, are currently "locked out" of auto-enrolment (AE), according to research from Now Pensions and the Pensions Policy Institute (PPI).

This represents a one third increase since the start of the pandemic in March, with an additional 100,000 women no longer meeting the eligibility criteria for automatic enrolment.

Now Pensions explained that single working mothers have had to juggle work, household chores, and schoolwork, and were therefore more likely to have reduced their working hours.

Indeed, previous research found that whilst 22 per cent of the working population worked part time, this increased to 43 per cent for single mothers, with single mothers on part time work earning, on average, £6,922, which is shy of the AE eligibility criteria.

However, the provider warned that this is also likely to have been “significantly exacerbated” by lockdowns and school closures seen amid the pandemic.

In addition to this, it stated that the number of women furloughed during the pandemic was “consistently higher” than men, highlighting previous analysis, which revealed that being
furloughed impacts pensions disproportionately.

It also highlighted recent research from Pregnant then Screwed, which found that 65 per cent of mothers who have been furloughed cited lack of childcare as the reason.

Industry experts have previously called for more affordable childcare, in order to address the pensions gender gap, amid concerns that this could be keeping women from the workforce.

Now Pensions also warned that the increasing number of single mothers missing out on a workplace pension in turn means an increase in the number missing out on “vital employer contributions".

In light of these concerns, it has urged the government to consider the removal of the AE earnings trigger, in order to start contributions from the first £1 of earnings, arguing that this would bring an additional 400,000 mothers into workplace pensions.

Commenting on the findings, Now Pension head of PR and campaigns, Samantha Gould, said: “It is worrying to see that single mothers’ ability to save for their futures has been hugely affected by the Covid-19 pandemic with almost half now ineligible for automatic enrolment.

“After what has been a difficult year with women bearing the brunt when it comes to being furloughed and taking on the bulk of childcare responsibilities it is really troubling that that even more single mothers have been locked out of pension saving during a time when finances have already been hit.

“Now Pensions is calling on the government to make important policy changes which would see another 3 million women, including a further 400,000 single mothers, saving.

"We must ensure that everyone has an equal opportunity to save for their futures and build an adequate savings pot for later in life.”

Gingerbread head of communications, Farah Baldrock, added: “Single parents face significant barriers to entering and progressing in work that offers long term financial security.

“Unable to ‘shift parent’ in the same way as couple parents can, single parents are far more reliant on external childcare support in order to work. The high costs of childcare mean many will only be able to work in part-time or insecure roles, limiting their earning potential.

“Coupled with greater demands on their income as the sole earner in the household, single parents are often at greater risk of falling into debt just to make ends meet meaning savings and pensions are simply out of reach."

She continued: “Covid-19 has only exacerbated the situation. The pressures of juggling work, caring for children and home-schooling with no external support has forced many to reduce their hours of work or leave work altogether.

“Urgent support is needed to reduce the barriers single parents face in securing quality, flexible and sustainable jobs that work around their caring commitments - without this single parents are at risk of being locked out of work altogether and this economic disadvantage will follow them throughout their lives.

“It’s not right that such a large section of our society will continue to experience hardship well into retirement simply because they are single parents and more must be done to ensure they are not left behind.”

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