Women, ethnic minorities and the disabled are more likely to miss out on workplace pensions

23rd September 2015


Women, ethnic minorities and the disabled are less likely than their counterparts to qualify for automatic enrolment into a pension scheme, a new study has found.

In 2012, the Government introduced new rules requiring employers to automatically enrol qualifying staff into a pension scheme, starting with the largest companies and moving on to smaller firms over the following five years.

By the end of June 2015, 20.2 million workers had been assessed for eligibility, the report by the Pensions Policy Institute reveals.It says that 9.3m of these workers were already active members of a qualifying pension scheme, 5.3m were automatically enrolled into a workplace pension scheme and 5.2m were found ineligible for automatic enrolment.
In order to be eligible for automatic enrolment an individual has to be employed, earning over £10,000 and aged between 22 and State Pension Age.

The latest study by the PPI shows that, of 13m employed women in the UK, around 4m (32%) do not meet the qualifying criteria for automatic enrolment, compared to 16% of male workers. 2.7m women earn below the earnings threshold of £10,000. This may be due partly to women being more likely to work in low- skilled (and low paid) jobs than men.

More women would qualify if second jobs were included in the assessment, the PPI found.

Its research also found that Pakistani, Bangladeshi and Black/African/Caribbean workers are less likely to meet the qualifying criteria for automatic enrolment.

The PPI says 32% of Pakistani workers and 33% of Bangladeshi workers do not meet the qualifying criteria. Black/African/Caribbean workers are also less likely as 29% do not meet the qualifying criteria. This compares to 23% of white, 20% of Chinese and 19% of Indian workers who fail to qualify.

Meanwhile 30% of disabled workers do not meet the criteria as well as the vast majority, 81%, of employed carers.

The PPI says: “The likelihood of meeting the automatic enrolment qualifying criteria is not evenly spread across the workforce. Some groups, for example, Bangla- deshi, Pakistani and Black/ African/Caribbean employees, women, people with disabilities, carers and people who work for small employers or people working in the service industry are far less likely than other employees to meet the qualifying criteria.

“This should be a matter of concern to policy makers as automatic enrolment is now reaching its third stage and smaller employers are starting to automatically enrol their eligible employees.”

It adds: “The policy community will need to closely watch whether certain groups are in danger of being excluded from automatic enrolment, and discussions should be held about whether there are potential policy levers which need to be put in place to ensure greater equality of coverage. “

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