Nearly nine million savers in the UK remain "significantly underpensioned" compared to the broader population, with research from Now Pensions revealing that private pension incomes for under-pensioned groups are around 43 per cent to 80 per cent of the population average.

The report, produced in partnership with the Pensions Policy Institute (PPI), showed that while progress has been made in some areas, such as rising eligibility for auto enrolment, the underpensioned challenge is far from resolved.

Indeed, the report showed that whilst women’s eligibility for auto enrolment has increased substantially since its inaugural report in 2020, rising from 77 per cent in 2020 to 85 per cent in 2025, women are still retiring with just 67 per cent of the UK average and single mothers with just 54 per cent of the UK average.

In addition to this, although 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, these groups are still below the population average with 62 per cent to 80 per cent of total pension saving compared to the UK average.

Given this, underpensioned groups are forced to rely more heavily on the state pension and left more vulnerable during retirement.

The research showed that the underpensioned groups most at-risk from retirement poverty remain unchanged.

This list includes carers, people from ethnic minority backgrounds, people with disabilities, women, divorced women, single mothers, self-employed people, and multiple jobholders.

In particular, the report showed that of the underpensioned groups, people with disabilities have the lowest pension income at just 43 per cent of the UK average, which means they have a private pension income of £3,650 compared to the population average of £8,500.

To help close the pension savings gap, Now Pensions has once again outlined five key policy reforms, urging the government to take action to address these savings gaps.

This included calls for the government to remove the £10,000 auto enrolment earnings trigger and scrap the lower earnings limit on pension contributions.

The report also called on the government to introduce a family carer’s top-up, ensure pension savings are considered in divorce settlements, and to take greater action on childcare availability and costs.

Speaking to Pensions Age, Now Pensions head of PR and campaigns, Samantha Gould, acknowledged that these five policy recommendations haven’t changed since 2019, but emphasised that the group is still calling for those proposals because they haven't happened, despite being six years on now.

"We’ve been talking about these issues for years, but following the change in government, a lot of that is starting the conversation again to see what policies fit with them and what doesn’t," she continued.

Gould acknowledged that this issue doesn't fit solely within the pensions system to fix, because some of it is about broader issues, although she argued that the impact that could be made in the pension sector, looking at the pension policies in particular, would have a massive impact in terms of getting more people to save.

Indeed, the report estimated that 1.5 million more people could be eligible for automatic enrolment if the £10,000 trigger cap was removed

Adding to this, Now Pensions chair of trustees, Joanne Segars, 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.”

PPI senior policy analyst, John Adams, added: “The rate of employment in the general population has fallen slightly since the previous report, and 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.”

Pensions and Lifetime Savings Association (PLSA) director of policy and advocacy, Zoe Alexander, agreed that more thought needs to be given to how best to support underpensioned groups.

"That’s why we’re carrying out research this year to consider how the automatic enrolment system might be better adapted to fit the needs of persistent low earners," she said.

"There is also urgent work to be done to bring more self-employed and gig economy workers into consistent saving for retirement. It is critical that as an industry we continue to shine a light on the outcomes of underpensioned groups so that the system can be developed to better meet their needs.”

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