Carers, people with disabilities and those from ethnic minority backgrounds are the most at risk of retirement poverty, according to the 2025 Underpensioned Report by Now:Pensions.
Disabled people earn the lowest pension, the report found, with a pension income of just 43% of the rest of the UK, which stands at £8,500.
The reason for the disparity is mainly due to those groups not reaching the £10,000 auto-enrolment limit to start contributing towards their retirement fund, the report reveals.
Other Brits exposed to missing out on topping up their pension are women – who face a gender pension gap worth £315 per year versus men and continuing inequality in what they earn when taking time away to raise a child.
More specifically, divorced, single women and single mothers also face a smaller retirement pot, with the latter retiring with only 67% of the UK average.
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Meanwhile, self-employed workers and multiple job-holders are also in danger of retiring with a lower income than the UK average. Those workers who may not be automatically supported with a pension plan from an employer earn 54% of the UK pension income average.
Following the report, Now:Pensions has urged the Government to make major changes to help Brits reach retirement age with enough cash.
The pension provider called for retirement savings to be considered in divorce settlements and for a carer’s top-up to be introduced. Its requests follow the Institute for Fiscal Studies’ (IFS’) suggestion last year that auto-enrolment should be introduced for workers aged 16 and older.
‘Millions will continue to struggle’
Joanne Segars, Now:Pensions’ chair of trustees, said: “Without further policy action, millions will continue to struggle to achieve a secure retirement.
“That’s why we’re suggesting key reforms, including removing the £10,000 auto-enrolment earnings trigger, scrapping the lower earnings limit on pension contributions, and introducing a family carer’s top-up.
“These measures would help ensure that everyone, regardless of their working patterns or circumstances, has a fairer opportunity to build a financially secure future.”
John Adams, senior policy analyst at the Pensions Policy Institute and author of the report, said: “The rate of employment in the general population has fallen slightly since the previous report, and under-pensioned groups such as carers, single mothers and divorced women are particularly affected.
“Changes to automatic enrolment criteria could make huge strides in pension saving, such as allowing the income from multiple jobs combined to count toward the earnings trigger or removing the earnings trigger entirely.”
