Thousands of industry workers are being "cheated" out of a pension due to "major flaws" in the Government's auto-enrolment pension scheme, according to union Ucatt.

The organisation said as the majority of construction workers are agency workers who change jobs frequently and the scheme only activates three months after starting a new job, there are "huge holes" in pension contributions.

In addition, workers being paid by umbrella companies will end up paying out nearly half their wages in tax, national insurance and pensions contributions. Overall, umbrella companies are forced to pay both employees (12%) and employers (13.8%) national insurance contributions. Combined with a 2% contribution to the auto-enrolment pension scheme and 20% income tax, workers will be paying out 47.8% of their wages.


UCATT Acting General Secretary, Brian Rye, said: "The success of the auto-enrolment pension scheme is not shared by the construction workers of the UK. In order for this scheme to become a true flagship policy the Government review must listen to the voice of construction workers.

"We welcome the success of the auto-enrolment pension scheme and we welcome the Government review into its implementation – but equally we want all construction workers to be able to share in its success and save towards a secure pension and comfortable retirement."

(LM)