Black and Minority Ethnic (BME) workers have less than half the pension savings of white workers, a new TUC-sponsored report has revealed.
The report shows that an Indian worker, for instance, typically has less than half (£22,100) the defined benefit pension savings of a white worker (£45,500).
The study carried out by the Pensions Policy Institute, also shows that black pensioners receive 16% (£1,404) less than the average for all pensioners and 20% (£1,820) less than white pensioners in State Pension.
In general, all women have barely half the pension savings of men. Women have, on average, £7,500 in savings in defined contribution schemes, compared to £14,500 for men.
The “Under-pensioned 2016” report shows that women typically have £32,000 in pension savings in defined benefit schemes, whereas men have £62,900.
Another category of disadvantaged workers is carers. The report shows that they typically have just £5,800 in savings in defined contribution schemes – 44.8% below average. Carers, the report shows, have only £6,000 amassed in defined benefit schemes – a massive 86.2% below average.
Self-employed workers are also disadvantaged. They typically have 4.8% less in defined contribution savings and 12.7% in defined benefit savings than average pensioners.
According to the report, workplace discrimination, job segregation and the lack of flexible working are the main reasons for the disparities.
Reacting to the report, TUC General Secretary Frances O’Grady said it was “a sobering reminder of Britain’s stark pension divide.”
“Everyone should have the chance of a decent retirement income, not just men in full-time employment,” Ms O’Grady said. “Women, carers and ethnic minority workers will continue to have a tough time in old age if swift action is not taken.”
She said there was urgent need to debate “on how unions, government and employers can work together to build on the success of auto-enrolment.”
“And we mustn’t shy away from looking at the underlying problems in our labour market that are driving these inequalities in pension saving,” Ms O’Grady said.
“Though pensions policy has played a role in supporting adequacy, the underlying causes of retirement income disparities cannot be tackled solely through pensions policy,” Head of Policy Research at the PPI Daniela Silcock said. “They involve labour-market, social and regulatory issues related to inequalities experienced during working-life. 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.”