"It is vital that we have a way to measure and assess the progress of policies aimed at redressing inequalities in the pensions system and broader policy landscape that impact upon it."
These groups include single mothers, divorced women, BAME groups, people with disabilities, carers, the self-employed and multiple job holders.
The report, created in collaboration with the Pension Policy Institute (PPI), reveals that only 42% of BAME groups, 53% of carers and 50% of disabled people are currently saving into a private pension.
People with disabilities are receiving a pension wealth of just £7,450, just 9% the UK average, while multiple job holders have a pension wealth of £2,650 - just 3% of the UK average.
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 inequalities mean they have less access to higher-paying jobs with fewer opportunities for career development and promotion, and are less likely to be eligible for automatic enrolment, all of which affect their ability to save adequately for their later life.
The Pensions and Lifetime Savings Association (PLSA) recommends that for a ‘moderate’ lifestyle in retirement, an individual should have £20,200 per year, or £29,100 per couple. When private pension income is combined with the State Pension and other benefits, most under-pensioned groups will struggle to achieve incomes above even the minimum retirement living standard of £10,200 per year for a single person and £15,700 for a couple.
People with disabilities are the only under-pensioned group who may reach the minimum retirement living standard once their income from the State Pension and benefits tops up their private pension savings to match those of the baseline population.
NOW: Pensions says that although auto enrolment has been a "good start", it is designed for traditional patterns of work and isn’t geared to help employees who take significant career breaks, work in multiple or part-time roles, or move frequently between jobs.
The provider is now calling for the removal of the £10,000 AE trigger, which it estimates would get an additional 2.5 million people saving into workplace pensions.
Additionally, its analysis shows that 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, senior policy researcher at the PPI, said: "Pensions saving is inherently a long-term process, with individual savings building up over the course of an entire working life and, as a result, policies aimed at increasing pension saving take time to embed and impact later life outcomes. It is vital that we have a way to measure and assess the progress of policies aimed at redressing inequalities in the pensions system and broader policy landscape that impact upon it. The Underpensioned Index produced in this research provides a means of monitoring the gap between the retirement income of underpensioned groups and the population average in order to identify where support may be most needed in order to improve later life outcomes."
Joanne Segars, chair of trustees at NOW: Pensions, added: “We were motivated to produce this report following our extensive work on the gender pensions gap and our ongoing collaboration with the Pensions Policy Institute. Some groups in the UK face huge savings gaps and those individuals who most need to save for later life are often the people who are effectively locked out of the current auto enrolment system.
“We need to improve retirement incomes across the board - and that starts with creating a level playing field so that everyone has the same opportunity to save for later life.
"We want to thank all the organisations and charities who contributed to this report, as well as the people who provided our case studies by sharing their personal stories with us.
"We hope that this report will help us raise the profile of these savings gaps and motivate the industry to find and share ways to close these pension savings gaps and create a fairer pension system.”
