Care workers are getting a national pension scheme, and the government hasn't said how it will work yet.
Yvette Cooper, the Health and Social Care Secretary, announced it at Labour's conference on 30 September. Community Care reported that she gave no details, but that it will most likely be a fund that staff and employers across the sector pay into together, with a target income in retirement.
The announcement follows lobbying from UNISON, which has warned that low pay and a lot of part-time work have left care workers with small pension pots. In April, UNISON argued that a collective scheme would help with retention and the status of care work as well as retirement incomes. Both UNISON and the GMB welcomed the news.
Why are pensions such a sore point in care?
Many care employers pay only the legal minimum, and many part-time care workers earn too little to qualify at all. According to Skills for Care's latest workforce report, as cited by Community Care, 70% of the 5,500 independent sector employers who answered the question paid no more than the 3% minimum, and 44% of care workers were part-time as of March last year.
Under auto-enrolment, employers pay in 3% of an employee's earnings, the worker pays 4% and tax relief adds 1%. But staff can opt out, and Community Care notes that low pay makes that more likely. Staff aged 22 and over only qualify if they earn more than £10,000 a year.
The government recently changed the law so that several employers can join one collective scheme. Ministers have said that pooling investment and risk should give staff more predictable pensions than an ordinary defined contribution scheme.
But Community Care also points out that it isn't clear whether the new scheme will ask employers for more than they pay now, or whether the government will chip in beyond tax relief.
Care England and the Homecare Association both welcomed the plan. But the Homecare Association said the detail will matter a great deal, including how the scheme is funded and run and how it works for thousands of employers of very different sizes.
What else is coming
In July the government announced that the first fair pay agreement is backed by £500 million for adult social care, with negotiations starting next April and the first settlement a year after that. An Adult Social Care Negotiating Body, made up of union and provider representatives, will set pay, terms and conditions, with ministerial sign-off. We looked at what that could mean for manager pay in an earlier piece.
Cooper also promised a workforce plan covering career paths, training and specialist skills, and thousands of places for young jobseekers in care sector academies. Those pair work placements with training. The Homecare Association said that, done well, they could create clearer routes into care from education and unemployment.
Who explains the pension scheme to the team?
I'd expect staff in a care home or a domiciliary agency to take their questions about the new pension scheme to the registered manager, because they run the service day to day. With a fair pay agreement and a workforce plan also on the way, those questions won't stop.
Picture a manager whose team has just seen the news on their phones. A senior carer asks whether the scheme means less in her pay packet, and the manager doesn't know, because nobody does yet. She says she'll find out, then looks, and all she finds is an announcement with very little detail.
What if the manager's seat is empty when the changes arrive?
When there's no registered manager, the questions about the pension scheme go to whoever is covering the job on top of their own, and they have no more answers than anyone else. That's a lot to carry while the fair pay negotiations start next April and the pension detail turns up. How long it lasts depends on how quickly the seat can be filled.
One domiciliary care provider in the South East spent about two months advertising for a registered manager and mostly heard from people outside domiciliary care. Once we looked locally at people with domiciliary care experience who had worked to CQC standards before, the process took four weeks.
What would I do before the detail arrives?
I'd start with the people you already have. If a deputy could step up to registered manager in the next year or two, have that conversation now, while nobody is under pressure. Even a rough idea of who could cover and who might step up gives you somewhere to start.
It's worth asking your payroll team what you pay in employer pension contributions today, so you have a figure to compare the new scheme with once the rules are published.
If there's already a gap in your management team, I'd look at that sooner rather than later, and our care recruitment page explains how we work with providers.
