A total of 2.8 million people from underpensioned groups such as care workers and women are now missing out on workplace pension saving, up from 2.5 million in 2020
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Around 300,000 women in the UK have been left with a shortfall on their workplace pension because of the pandemic, new figures reveal.
The figures show around 2.2million women now have gaps in their workplace retirement pot – in addition to 600,000 people with disabilities, 35,000 carers and 106,000 multiple jobholders who do not earn the £10,000 “trigger” to be automatically enrolled into a workplace pension in a single job.
The report was compiled by pension provider NOW: Pensions in collaboration with the Pension Policy Institute (PPI).
It said that from carers and single parents to part-time workers, the pension savings gaps for some of the most financially at-risk groups have worsened during the Coronavirus pandemic.
Income levels tend to have dropped more for under-pensioned people typically, and the ability to keep up with bills, savings and debt repayments is lower among these groups.
They may have also found it more challenging to avoid accessing pension savings during the periods of investment volatility experienced during 2020, the report said.
People in under-pensioned groups are more likely than average to experience labour market inequalities and be affected by furlough and redundancies, researchers found.
They are more likely to work in the industries that have been most affected by public health restrictions, such as retail, hospitality and tourism, or are in low-paid, part-time or irregular employment.
Auto-enrolment is a government initiative that requires all employers to automatically enrol staff into a pension scheme and make contributions towards it if they are aged 22 or over and earn more than £10,000.
But the report calls for the removal of this £10,000 threshold to ensure more workers are planning for their later life.
Samantha Gould, head of campaigns at NOW: Pensions, said: “We hope that this report will help raise the profile of these savings gaps and motivate the industry and policy-makers to close these pension savings gaps and create a fairer pension system.”
A Department for Work and Pensions spokesperson said: “Helping women save for retirement remains a Government priority, including throughout the pandemic.
“Thanks to automatic enrolment the latest figures show the number of women who benefit from a workplace pension is equal to the number of men.”
Who are the Underpensioned Groups?
- Divorced women
- Single mothers
- People with disabilities
- People from ethnic minority groups
- Multiple job holders