Hospitality workers risk spending their old age in poverty because of the minimal take-up of new pension schemes.
An inability to save because of low wages, the high number of casual workers denied access to company pension schemes and ignorance about the opportunities available, mean that hospitality workers will be forced to rely on government hand-outs during retirement.
"There's a whole generation of people who, come retirement age, won't have anything beyond a state pension," said Dave Turnbull, regional organiser for the T&G union.
Of the one million stakeholder pension schemes set up by employers, 90% have no members, according to the Association of British Insurers.
The hospitality industry has a particularly low-participation rate, a problem compounded by the high number of hospitality employees living on the minimum wage or working on a part-time basis, many of whom cannot afford to save for their retirement.
Last year, about 17% of employees in the hospitality industry were paid the adult national minimum wage.
"Workers are more concerned about more immediate problems like paid sick and holiday leave," says Robert Badland, senior organiser for the GMB. "It will be a big issue when hospitality workers won't have enough to live on by retirement age."
British Hospitality Association deputy chief executive Martin Couchman said means-tested state benefits in retirement often removed any incentive to save because anything employees put aside would wipe out any government contribution.
David Fairs, pensions specialist at KPMG, said the introduction of stakeholder pensions had done little to help contract workers save for the future. "It's a big dilemma for people with limited funds to give up a percentage of their wages. Compulsion could be the only way."
The Government introduced stakeholder pensions in April 2001 to encourage more people to save for their retirement. All companies with more than five employees are obliged to offer a pension scheme.
Very few hospitality companies offer staff an occupational pension scheme where both employee and employer contribute.
According to the Mayor of London's recent consultation paper entitled Tackling Poverty in London, pensioners in inner London face by far the highest rates of income poverty in Great Britain, a finding confirmed by the latest figures from the Department for Work and Pensions.
By Jessica Gunn
Source: Caterer & Hotelkeeper magazine, 10 - 16 July 2003