Underpensioned groups reach retirement with private pension income less than two-thirds of average

Millions of people in the UK remain significantly underpensioned compared to the wider population.

The latest data reveals that underpensioned groups have annual private pension incomes of between £3,650 and £6,750.

This is compared to the population average of £8,500, leaving many individuals vulnerable to financial insecurity in retirement.

Since 2012, auto enrolment has transformed the way UK workers save for retirement and has brought more than 11 million additional people into a workplace pension scheme.

However, many people in underpensioned groups do not meet the eligibility criteria for auto enrolment and miss out on the opportunity to save for their retirement.

Progress has been made in some areas, such as rising eligibility for auto enrolment, but the underpensioned challenge is far from resolved.

As a consequence, these groups are forced to rely more heavily on the State Pension.

People from ethnic minority backgrounds and carers are the groups that have seen an increase in employment rates and, consequently, pension savings since the 2022 report. However, despite the rise, these groups are still below the population average with 62% to 80% of total pension saving compared to the UK average.

Of the underpensioned groups, people with disabilities have the lowest pension income at just 43% of the UK average, which means they have a private pension income of £3,650 compared to the population average of £8,500.

Women’s eligibility for auto enrolment has increased substantially since the inaugural report in 2020, rising from 77% in 2020 to 85% in 2025. Despite this progress, women are retiring with just 67% of the UK average and single mothers with just 54% of the UK average.

Pension income of the self-employed is 54% of the UK average population.

Joanne Segars, Chair of Trustees at now:pensions said: “Without further policy action, millions will continue to struggle to achieve a secure retirement. That’s why we’re suggesting key reforms, including removing the £10,000 auto enrolment earnings trigger, scrapping the lower earnings limit on pension contributions, and introducing a family carer’s top-up. These measures would help ensure that everyone, regardless of their working patterns or circumstances, has a fairer opportunity to build a financially secure future.”

John Adams, Senior Policy Analyst at the PPI and author of the report said: “While the rate of employment in the general population has fallen slightly since the previous report, under pensioned groups such as carers, single mothers and divorced women are particularly affected. Changes to automatic enrolment criteria could make huge strides in pension saving, such as allowing the income from multiple jobs combined to count toward the earnings trigger or removing the earnings trigger entirely.”

Samantha Gould, Head of PR and Campaigns (and report author) at now:pensions said: “While progress has been made in bringing more people into pension saving, significant inequalities remain. Many underpensioned groups—including women, carers, disabled people, and those in non-traditional employment—continue to face systemic barriers that limit their ability to save for later life. These individuals are more likely to earn lower wages, work part-time, or take time out of employment for caring responsibilities, all of which contribute to lower pension savings and greater financial insecurity in retirement.

This is the third now:pensions report looking into pension saving in the UK and whilst there have been some improvements in pension saving adequacy, these underpensioned groups still experience a significant pension savings gap.

The Underpensioned Report 2025 is produced in partnership with the Pensions Policy Institute (PPI), using data from the PPI’s The Underpensioned Index 2024 edition.