Pension participation amongst ethnic minorities is lower than average, with non-pension sources expected to play an important role in funding the retirement of ethnic minorities, research from Phoenix Insights has revealed.

The survey found that, compared to the average retirement income of £25,000 expected by White British people, most ethnic minority groups expect to have a retirement income around 16 per cent higher if they were of a similar age and had similar salaries.

The percentage of people from these groups expecting a “comfortable” retirement was also greater, at 38 per cent of people from Black African, 37 per cent of people from Indian or Pakistani and 36 per cent of people from Bangladeshi ethnic backgrounds, compared to 25 per cent among White British people.

The research also suggested that individuals from ethnic minority groups aim to retire up to two years earlier that the UK average.

Yet despite these expectations, the research found that the weekly income for retired Asian and black families was £391 and £412 respectively, compared to the population average of £556.

Phoenix Insights’ research also found that people from ethnic minorities were also more likely to turn to non-pension sources, as those from Pakistani, Bangladeshi and Indian ethnic backgrounds were more likely to rely financially on support networks, such as friends and family, in retirement, than White British people.

Property wealth was also more likely expected to be drawn upon by most ethnic minority groups than for White British people, which Phoenix Insight suggested could be demonstration of differences in cultural norms and family structures.

In light of the findings, the group argued that greater awareness of how much money is needed for life in retirement is vital to ensure pensioners from ethnic minorities can afford a good standard of living after leaving work.

It also urged industry leaders to think about how they communicate and engage with ethnic minority groups as customers so they can better understand the causes of, and potential solutions to, an apparent retirement funding gap in many communities.

Phoenix Insights director, Catherine Foot, commented: “Across the UK, we know that there are up to 18 million people who are under-saving for retirement. Tackling this problem should be an urgent priority for government, employers, and individuals alike, as the nation is living longer than ever before.

“However, by taking a big picture view, we can be at risk of missing the nuanced challenges faced by different groups within society, which is why Phoenix Insights has chosen to take a deeper dive into how different ethnic minority groups are preparing for retirement.

“Our findings are clear that ethnic minority groups do indeed have different expectations and levels of preparation for retirement, whilst at the same time demonstrating the need to better understand how providers and government can support these groups so they can enjoy a good quality retirement that meets their financial needs.”

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