Underpensioned groups retire with private pensions far below the UK average

Underpensioned groups in the UK reach retirement age with private pension incomes less than two-thirds of the population average – just £3,650

London, 30^th April, 2025 — now:pensions part of the Cardano Group, a business of Marsh McLennan (NYSE:MMC), today published The 2025 Underpensioned Report, in partnership with the Pensions Policy Institute (PPI).

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.

Fairer pensions for all

To help close the pension savings gap, now:pensions is proposing five key policy reforms:

1. Remove the £10,000 auto enrolment earnings trigger
2. Scrap the lower earnings limit on pension contributions
3. Introduce a family carer’s top-up
4. Ensure pension savings are considered in divorce settlements
5. Take greater action on childcare availability and cost

Carers and ethnic minority groups

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.

People with disabilities

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 and single mothers

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.

The self-employed

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.

About the Underpensioned Report 2025

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

This is the sixth report published since 2019 looking at pension wealth data of people in the UK.

1. Gender Pensions Gap 2019 here
2. Underpensioned (1) report 2020 here
3. Gender Pensions Gap 2022 here
4. Underpensioned (2) report 2022 here
5. Gender Pensions Gap report 2024 here

About now:pensions

now:pensions is an award-winning UK workplace pension provider that manages the pension savings of millions of members on behalf of tens of thousands of employers from a wide range of industries. now:pensions is part of the Cardano Group. Cardano Group, a business of Marsh McLennan (NYSE:MMC), is a market leader in providing risk and investment management services designed to make pension outcomes more stable and robust. 

About the Pensions Policy Institute (PPI)

We are an independent educational research Institute: The Pensions Policy Institute (PPI) does not lobby for any particular solution, and we are not a think-tank taking politically influenced views. The PPI is an educational research charity, and have been providing non-political, independent comment and analysis on pensions policy and retirement income provision in the UK for over 20 years. Our aim is to improve information and understanding about pensions policy and retirement income provision through research and analysis, discussion, and publication. For news and other information about The PPI please visit www.pensionspolicyinstitute.org.uk