People with disabilities have pension savings worth third of average pot

Written by on 20 May 2022

People with disabilities ‘have pension savings worth third of average pot’

Pension savers with disabilities typically have savings worth only around a third of the average pot as they approach retirement, a study has found.

People aged 60 to 64 with a disability have £47,980 saved on average, according to research by the Pensions Policy Institute.

This is only around 36% of the average UK pension pot size of £130,928 – a difference of nearly £83,000.

The research was commissioned by pension provider NOW: Pensions, which said there are just over four million disabled workers in the UK and many are in low-paying or part-time jobs.

The high prevalence of part-time work among disabled workers means many are excluded from workplace pensions as they do not earn a minimum of £10,000 in a single job – the earnings “trigger” for automatic enrolment.

Joanne Segars, chair of trustees at NOW: Pensions, said: “We want to make pension saving fairer for everybody in the UK and our policy proposal to remove the £10,000 earnings threshold would help get a further 500,000 disabled people saving for their retirement.”

A Government spokesperson said: “The number of disabled people in employment has increased by 1.3 million since 2017 and over the next three years we will invest £1.3 billion in employment support for disabled people and people with health conditions.

“Alongside this, automatic enrolment has helped millions more people save into a pension, with participation among eligible people with a disability rising from 53% in 2012/13 to 88% in 2019/20.

“Our plans to remove the lower earnings limit for contributions and to reduce the eligible age of being automatically enrolled to 18 in the mid-2020s will enable even more people to save more and start saving earlier.”

Published: by Radio NewsHub

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