Master trust calls for AE extension to tackle inequalities
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The latest report on underpensioned groups by the Pensions Policy Institute and Now Pensions suggests most have a private pension income of less than two-thirds of the population average, with disabled people worst affected.
The average private pension income of all underpensioned groups has increased but remains significantly lower than the population average, the report published on Wednesday found. The third report in the series since 2020 considers the pension incomes of women, single mothers, divorced women, ethnic minorities, people with disabilities, carers and the self-employed and how they have changed in the past five years.
Private pension incomes as a percentage of the general population have slightly increased for the self-employed, ethnic minority groups and single mothers since 2022, but have reduced for women overall, divorced women, carers and, most significantly, those with disabilities – down to 45% this year, from 48% in 2022. Overall, people with disabilities have just 43% of average pension incomes, or £3,650.
The average private pension income of all underpensioned groups has increased but remains significantly lower than the population average, the report published on Wednesday found. The third report in the series since 2020 considers the pension incomes of women, single mothers, divorced women, ethnic minorities, people with disabilities, carers and the self-employed and how they have changed in the past five years.
Private pension incomes as a percentage of the general population have slightly increased for the self-employed, ethnic minority groups and single mothers since 2022, but have reduced for women overall, divorced women, carers and, most significantly, those with disabilities – down to 45% this year, from 48% in 2022. Overall, people with disabilities have just 43% of average pension incomes, or £3,650.
Carer top-up and pension sharing
To help close those pension gaps, Now is again urging the government to remove the £10,000 auto-enrolment earnings trigger. It also wants to see the lower earnings limit on pension contributions scrapped, something the secretary of state was recently given the powers to do but has not made use of this power.
In a bid to address persistent economic inequalities around gender and caring, the DC master trust also proposes introducing a family carer’s top-up; ensuring pension savings are considered in divorce settlements – something the Law Commission has also highlighted; and taking greater action on childcare availability and costs.
Together, “these measures would help ensure that everyone, regardless of their working patterns or circumstances, has a fairer opportunity to build a financially secure future”, said trustee chair Joanne Segars.
PPI senior policy analyst and author of the report, John Adams, noted that the rate of employment in the general population has fallen slightly since the previous report, with underpensioned groups such as carers, single mothers and divorced women 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,” he said.
