Upping the earnings threshold for auto-enrolment into occupational pension schemes will hit women and part-time, agency and temporary staff, shadow pensions minister Rachel Reeves says.
The government yesterday said auto-enrolment and NEST would go ahead from 2012, with no exemption for any business but with a three month grace period before employers must enroll staff into a pension scheme.
Pensions minister Steve Webb said auto-enrolment would only apply when a person earns more than £7,475 per year, considerably higher than the previously proposed level of £5,035.
Reeves' questioning on Monday forced Webb to reveal up to 500,000 women and a similar number from black and minority ethnic communities will be excluded from auto-enrolment by the threshold hike.
"Overall, I am happy the coalition has gone ahead with Labour's plans for NEST and auto-enrolment," Reeves says.
"However, I do not agree with this government's attempts to unpick the recommendations, as those that lose out are likely to be the very people that the scheme was designed to reach; namely women and part-time workers, and temporary and agency workers."
Reeves says the addition of a three-month waiting period will create many more opt-outs.
"If staff are auto-enrolled from day one, they never notice a dip in their salary, wherease if they spend all their salary and after three months there is a 3% reduction, they will feel the pinch and op out," she says.
The shadow minister says Labour will largely support the Pensions Bill when it goes to Parliament early next year, but will push for amendments to extend auto-enrolment to more people.
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