The report, published today (December 7), found a number of common factors within these groups which are causing barriers to saving, including non-traditional work patterns, a lower percentage of homeownership, and being impacted by inequalities in the labour market.
People from underpensioned groups - including ethnic minorities, people with disabilities and carers and single mothers - have private pension incomes that range from 18 per cent to 64 per cent lower than the UK average.
The new “Underpensioned Index 2022”, published in partnership with the Pension Policy Institute (PPI), found that the pension savings gaps for some of the most financially at-risk groups have worsened since the 2020 index was first published.
Employment rates of the underpensioned groups, especially for members of certain ethnic groups, remain well below the UK population average.
Meanwhile, women’s average annual incomes are 80 per cent of the UK average and 67 per cent of men’s average annual incomes.
For single mothers this figure is substantially lower at just 60 per cent of the UK average.
Since 2018, the gap between women’s average incomes and the UK average has grown from 12 per cent to 20 per cent.
The report also found that of the 14.6mn employed women in the UK, around 2.5mn (17 per cent) do not meet the qualifying criteria for automatic enrolment, compared to 8 per cent of male employees.
Around 1.9mn women earn below the earnings threshold of £10,000.
Samantha Gould, head of campaigns at Now Pensions and report author, said: “There are a total of 8.6mn people in underpensioned groups that are locked out of automatic enrolment, missing out on potentially billions of pounds of pension saving annually.
“We have been campaigning on behalf of underpensioned groups since 2019. Our latest report has revealed that private pension incomes were less than 85 per cent of the population average, with some groups experiencing significant declines compared to our 2020 index.”
Gould said while the current economic environment means that it is challenging for the government to implement potential remedies, “doing nothing is not an option”.
“Action is needed now to reduce the pensions gap and allow everyone to enjoy the comfortable retirement they deserve.”
The report outlined that private pension incomes of underpensioned groups remain below three-quarters of average population private pension incomes, with some groups experiencing significant declines compared to the 2020 Index.
Private pension incomes of divorced women, people from ethnic minority backgrounds and people with disabilities have all declined compared to the population average since 2012.
