Collective care worker pension scheme announced
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The government will create a national collective pension scheme for care workers, Yvette Cooper, health and social care secretary, has said.
Speaking at the Labour party conference on Wednesday, Cooper said: "We will introduce the first ever national collective pension scheme for workers in the care sector."
The veteran Labour politician said that "it is just wrong that the people who work hardest to help others maintain dignity in old age too often get nothing back for retirement themselves".
The new scheme will be "a proper pension scheme to give our care workers the respect that they deserve", she added.
A collective defined contribution scheme for care workers has been campaigned for by Unison, which represents many in the sector. The union had put forward two models, a collective defined contribution and a defined benefit scheme.
The TUC has said CDC should become the norm for all workers. General secretary Paul Nowak said: “Unions stand ready to work with government to deliver a high quality pension scheme fit for the social care sector. The next step is to make sure collective schemes become the norm for the many private sector workers now building up pensions in individual pots."
Nowak said the government's Pension Commission can play a key role in bringing this about.
A collective defined contribution scheme for care workers has been campaigned for by Unison, which represents many in the sector. The union had put forward two models, a collective defined contribution and a defined benefit scheme.
The TUC has said CDC should become the norm for all workers. General secretary Paul Nowak said: “Unions stand ready to work with government to deliver a high quality pension scheme fit for the social care sector. The next step is to make sure collective schemes become the norm for the many private sector workers now building up pensions in individual pots."
Nowak said the government's Pension Commission can play a key role in bringing this about.
The news of a new collective pension scheme for care workers comes on the heels of Andy Burnham's announcement that a National Care Service will be funded by changing how the state pension is uprated.
The creation of a new scheme for care workers was welcomed by head of CDC at Hymans Robertson, Lauren Branney.
“It’s encouraging to see the government recognising the opportunity that Collective Defined Contribution pensions can present for both workers and employers in adult social care," she said.
Branney thinks the care sector is particularly well suited to an industry-wide CDC scheme, as workers frequently move between employers and many hold multiple part-time roles. The workforce is predominantly female, with a greater likelihood of career breaks and varied working patterns.
"Rather than building up a collection of disconnected pension pots, a sector-wide CDC arrangement could allow workers to save in one place throughout their careers, simplifying retirement planning and helping deliver better retirement outcomes," said Branney.
