BAME communities and disabled people ‘have fraction of average pension wealth’
People with disabilities, carers and those from BAME communities typically have private pension wealth amounting to just a fraction of the UK average, according to a report.
It found that only 42% of BAME groups, 53% of carers and half (50%) of disabled people have a private pension.
This compares with two-thirds (65%) of the population generally.
When taking into account both people who have a private pension and those who have none at all, the report found that people across all of the “under-pensioned” groups it identified typically have about 15% of the private pension wealth of the UK average.
On average across all the under-pensioned groups, people have £12,044-worth of private pensions built up, compared with £80,690 across the general population – including both those who have pension savings and those who do not.
Many people who work for an employer are automatically enrolled into a workplace pension.
But the research found only about a third (36%) of self-employed people have a private pension.
The research was compiled by pensions provider NOW: Pensions and the Pensions Policy Institute (PPI).
Having “non-traditional” work patterns, not owning your own home and having limited access to higher-paid jobs can all impact on the ability to save into a pension, the report said.
It argued that automatic enrolment was designed for traditional patterns of work and is not geared to help employees who take significant career breaks, work in multiple or part-time roles, or move frequently between jobs.
It said removing the £10,000 earnings trigger at which someone is auto-enrolled would result in an additional 2.5 million people saving into workplace pensions.
Joanne Segars, chair of trustees at NOW: Pensions, said: “Some groups in the UK face huge savings gaps and those individuals who most need to save for later life are often the people who are effectively locked out of the current auto-enrolment system.”
Lauren Wilkinson, senior policy researcher at the PPI, said: “The ‘under-pensioned index’ produced in this research provides a means of monitoring the gap between the retirement income of under-pensioned groups and the population average, in order to identify where support may be most needed in order to improve later life outcomes.”
Phil Brown, director of policy at workplace scheme the People’s Pension, said: “We welcome anything that serves to highlight that there are millions of under-pensioned people in the UK and this latest research does just that.
“Our own research into the ethnicity pensions gap earlier this year showed that the average ethnic minority worker is £3,350 a year worse off than people of the same age from other groups.
“When the economic situation permits, we strongly urge that the Government removes the £10,000 a year earnings threshold for automatic enrolment as well as reducing the age eligibility from 22 to 18. This will allow more people to save for a pension and for longer.”
Here are the percentages in each group with any private pension savings, and the median average private pension wealth among those who do have savings, according to the report:
– UK population average, 65%, £217,490
– Single mothers, 55%, £140,400
– Divorced women, 59%, £140,400
– BAME groups, 42%, £189,900
– People with disabilities, 50%, £111,730
– Carers, 53%, £180,620
– Self-employed, 36%, £121,200
– Multiple job holders, 71%, £12,400
– Men, 87%, £302,500