Some underpensioned groups in the UK are reaching retirement with private pension incomes of just £2,850.

By missing out on auto enrolment, these groups are also missing out on millions of pension contributions every year, increasing the likelihood of pensioner poverty.

  • Over 8.6 million people from “underpensioned” groups are now missing out on workplace pension savings
  • Labour market inequalities, the Covid-19 pandemic and the cost of living crisis have all had a huge impact on people’s ability to save for later life.
  • People from underpensioned groups (including ethnic minorities, people with disabilities, carers and single mothers) have private pension incomes that range from 18% to 64% lower than the UK average.

Today, a new report identifying the private pension savings of underpensioned groups in the UK has been published by NOW: Pensions, the workplace pension provider for almost 2 million people. The report found a number of common factors within these groups which are presenting barriers to saving, including non-traditional work patterns, a lower percentage of homeownership, and being impacted by inequalities in the labour market.

The new “Underpensioned Index 2022”, created in collaboration with the Pension Policy Institute (PPI), reveals 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.
  • Women’s average annual incomes are 80% of the UK average and 67% of men’s average annual incomes.
  • For single mothers this figure is substantially lower at just 60% of the UK average.
  • Since 2018, the gap between women’s average incomes and the UK average has grown from 12% to 20%.

Of the 14.6 million employed women in the UK, around 2.5 million (17%) do not meet the qualifying criteria for automatic enrolment, compared to 8% of male employees. 1.9 million women earn below the earnings threshold of £10,000, making up 79% of the workers who do not meet this qualifying criterion.

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. Single mothers’ private pension incomes have remained at 50% of the population average, while for women in general and carers the gap has narrowed, but not greatly.

Almost all groups will get the majority of their income in retirement from the State Pension.

When private pension income is combined with State Pension and other benefits, most underpensioned groups will struggle to achieve incomes above the minimum PLSA retirement living standard of £10,900 per year for a single person and £16,700 for a couple.

NOW: Pensions policy proposals to create a fairer UK pension system

Getting more people saving via automatic enrolment would be the most effective way to start closing the current savings gaps faced by the UK’s underpensioned. NOW: Pensions’ report makes policy proposals to close the current savings gaps for these groups inorder to help boost financial, later life equality.

1. Removal of the £10,000 AE trigger would get over 3 million more people from underpensioned groups saving into workplace pensions.

If the earnings trigger was removed, assuming minimum required contributions on band earnings were made, lower earners could have made around £273m in contributions over a one-year period in 2021, with £102m from employer contributions and £171m from employee contributions.

2. Pension contributions from the first £1 would increase pension wealth for these groups by an average of 30% – though for some groups, such as single mothers, this would increase by 52%.

If both policies were introduced, we would generate an additional £1.2 billion in annual pension contributions.

Lauren Wilkinson, lead researcher at the Pensions Policy Institute: “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. When income from State Pension and benefits are taken into account, the underpensioned gap is smaller but still significant.

The current economic climate could exacerbate the underpensioned gap, making it more challenging to implement further policies to narrow the gap in the short term, but it is important that the underpensioned challenge is approached with a long-term view.”

Samantha Gould, Head of Campaigns at NOW: Pensions and report author: “There are a total of 8.6 million 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% of the population average, with some groups experiencing significant declines compared to our 2020 index.

Whilst 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.”

Joanne Segars OBE, Chair of Trustees at NOW: Pensions commented: “Since it was introduced ten years ago, auto-enrolment has transformed how millions of people in the UK save for their pensions.

Yet for far too many in our society, a comfortable retirement remains out of reach, usually through no fault of their own. These groups are often locked out of the auto-enrolment system, unable to earn enough to put money aside for later and, as a result find themselves on the wrong side of a growing pension savings gap.

At NOW: Pensions, our mission is to fight for a fair pension system that enables everyone to get the retirement they deserve.”

For more information and pension advice visit


Notes to editors

The report will be published on Wednesday 7 December and is available at

For more information, please contact:

Samantha Gould

NOW: Pensions


Instinctif Partners

Libby Wallis/Will Todd

07581205660 / 02074572020

Who are the Underpensioned Groups?

  1. Women
  2. Divorced women
  3. Single mothers
  4. Carers
  5. People with disabilities
  6. People from ethnic minority groups
  7. Self-employed
  8. Multiple job holders

Ineligibility for AE

Group% ineligible in 2020Number% ineligible in 2022NumberDifference
Population average155m134m-1m
Single mothers31382k29317k-65k
Divorced women14100k1082k-18k
People from ethnic minority backgrounds15600k13549k-51k
People with disability21800k18721k-79k
People with caring responsibilities37590k22490k-100k

About NOW: Pensions

NOW: Pensions is leading UK workplace pension provider. We look after the pension savings of tens of thousands of employers and millions of members from a wide range of industry sectors.

We have a clear mission – to help everyone save for a more financially secure future. This means achieving the best financial outcomes for our own members, while fighting for a fair pension system to enable all pension savers to enjoy the retirement they deserve. We do this by highlighting pension inequalities and campaigning for change.