Ethnic minority pensioners are an average £3,350 a year worse off in retirement than others their age, The People’s Pension (TPP) has revealed.

Its report - Measuring the Ethnicity Pension Gap – found that the average ethnic minority pensioner’s retirement income is 24.4 per cent less than the average white pensioner.

Furthermore, the gap is even larger when gender is accounted for, with TPP finding that a female ethnic minority pensioner is on average 51.4 per cent worse off in retirement than a white male pensioner.

TPP stated that the gap was driven by lower average earnings, variable employment rates and that ethnic minority workers being more likely to be self-employed.

It has urged the government to reform the auto-enrolment system to reduce the gap, including lowing the minimum qualifying earnings, making contributions count from the first pound and establishing an independent pension commission to monitor and address inequalities.

Commenting on the findings, TPP director of policy, Gregg McClymont, said: “Our report highlights large inequalities, which will become starker as the growing ethnic minority population reaches retirement age.

“Understanding the size of the problem and causes is a vital first step in devising appropriate policies for closing the gap.

“The reasons for the large ethnicity pensions gap are complex because they reflect labour market factors but improvements for the long term can be made rapidly in pensions policy.

“Lowering the minimum income needed to qualify for auto-enrolment from £10,000 a year to just over £6,000 and making pensions contributions count from the first pound earned would help the under-pensioned.

“We are also calling for the establishment of an independent pensions commission to highlight, analyse, and report on long-term issues of this kind and on comprehensive solutions.”

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