Retirement inequalities to persist despite pension reforms
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Version 0 of 1. Women, disabled people and those from ethnic minority groups will continue to be worse off in retirement over the next few years despite various state and private pension reforms, according to a new study. Researchers from the Pensions Policy Institute (PPI) said that although differences in pension income had reduced over the past decade, more needed to be done to tackle “inequalities” in the labour market ranging from discrimination to being paid less than the minimum wage. The study, sponsored by organisations including the Trade Union Congress and the Joseph Rowntree Foundation, looked at the “under-pensioned” - those who tend to have lower than average levels of pension savings and income. This includes many women, ethnic minorities, disabled people, carers and the self-employed. Social and labour market factors play a big part, as they have an impact on the jobs that people are able to get and how much they earn, and in turn on how much money they can put aside for their retirement. The report said that “a lack of availability of flexible work, and a lack of understanding of employers about the need for flexibility” was limiting some people’s work options, while those from some under-pensioned groups were more likely to experience discrimination when it came to hiring, promotion and pay. Meanwhile, some ethnic minority groups are more likely to be paid less than the minimum wage of £6.70 an hour. Around 3% of white workers do so, compared to 11% of Chinese workers and 18% of Bangladeshi workers, the study found. It also found that disabled people; Pakistani, Bangladeshi and Chinese people; carers; and women were more likely to be unemployed or economically inactive than people from other groups. The authors said reforms such as the new flat-rate state pension taking effect on 6 April, the national living wage (which means staff over the age of 25 must be paid at least £7.20 an hour from 1 April), and the ongoing automatic pension enrolment would all help these people. Daniela Silcock, head of policy research at the PPI, said that once the new state pension had been fully phased in, there would no longer be significant differences in state retirement income between the under-pensioned and the public as a whole. But she added: “Lower private pension saving and income levels among the under-pensioned are projected to continue. These mainly arise from particular labour-market characteristics ... Therefore, addressing ongoing differences in private pension income would involve a joint effort from government departments, employers, social services, regulatory bodies and community support groups.” |