Millions missing out on £1.2 billion of annual pension contributions, due to being locked out of workplace pensions in the UK

08 December 2020

Research conducted by the workplace pension provider, NOW:Pensions has highlighted the fact that there are a number of ‘under-pensioned’ groups in the UK.

The report that has been published identifies the seven most ‘under-pensioned’ groups in the UK and reveals that these are the groups that are reaching retirement age with just 15% of the average UK private pension wealth.

The key findings are as follows:

  •   81% of carers, 21% of disabled people and 23% of women are locked out of automatic enrolment into a workplace pension at present
  •   Individuals with disabilities have private pension wealth of £,7,450 – this is a mere 8% of the UK average
  • Those who have multiple jobs have pension wealth of £2,650 – this equates to 3% of the UK average
  •  Only 42% of BAME groups, 53% of carers and 50% of disabled people are saving into a private pension at present

A table to demonstrate the findings of the research is provided as per below:


Median private pension wealth

% with any pension savings

Median private pension wealth (among those with savings)

UK population average




Single mothers




Divorced women




















Multiple Job Holders








*This is £0 because the majority of people in these groups do not contribute to any pension saving, so when the total pension wealth for this group is divided with the number of individuals it averages out at £0. 

Several common factors have been identified which present barriers to saving for retirement, and these include non-traditional work patterns, a lower percentage of homeownership and being affected by inequalities in the labour market. These inequalities mean that certain individuals cannot access higher-paying jobs and there are less opportunities for both career development and promotion in the roles that they are in. This subsequently means that they are less likely to be eligible for automatic enrolment, which then impacts their ability to save sufficiently for their retirement.

The Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards suggest that an individual should have £20,200 per year, or £29,100 per couple for a ‘moderate’ lifestyle in retirement. When a private pension income is combined with the State Pension and other various benefits, most under-pensioned groups will find it hard to achieve incomes that exceed the minimum retirement living standard of £10,200 per year for an individual, or £15,700 for a couple.

Individuals with disabilities are the only under-pension group who may possibly reach the minimum retirement living standard once the State Pension and benefits they receive top up their private pension savings.

Auto-Enrolment has been applauded for placing more individuals into pension saving in the UK, but there is still more work to be done, as there are still millions of people not saving into a pension scheme. The research conducted by NOW: Pensions indicates that Auto-Enrolment was designed for traditional patterns of work and isn’t designed to assist employees who take substantial career breaks or those who work in part-time roles.

NOW: Pensions policy proposals

 The report offers two policy proposals which would serve to close the pension savings gap, as follows:

  • Remove the £10,000 AE trigger – this would result in an extra 2.5 million people saving into workplace pension
  • Pension contributions should be taken from the first £1 – this would increase pension wealth for ‘under-pensioned’ groups by an average of 30% - however, in some scenarios it would increase by 52%

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