Disabled savers’ pension wealth is just 36% of UK average

The research, supporting a report to be issued later this year, found that just 54 per cent of the estimated 4mn disabled workers in the UK are saving into a pension, with an average pot size of £47,980.

The average pension pot in the UK is worth £130,928, meaning the average pot for disabled people is almost £83,000 lower than that of workers at large.

The Now Pensions research suggests that, though the number of disabled people in work is increasing, there is still a high level of unemployment, with disabled people more than twice as likely to be unemployed. 

Meanwhile, those in work are often limited in the amount of work they can do and the type of jobs they are eligible for, often being restricted to part-time and low-paid employment that leaves them underserved by auto-enrolment.

The rate of workers in part-time occupations is 20 per cent in the country in general, but rises to 28 per cent among the disabled, meaning they are less likely to meet the £10,000 auto-enrolment earnings threshold.

Even those earning more than £10,000 can still find themselves missing out due to the £6,240 lower earnings threshold. Only earnings above that amount are pensionable, meaning people earning £10,000 are only contributing 3.8 per cent of the 8 per cent minimum, and missing out on additional employer contributions.

The overall lower savings rate among the disabled is despite the fact that an above-average number of those who are eligible for auto-enrolment participate in it. The national figure is 80 per cent of those eligible, while the figure for disabled people who are eligible is 83 per cent.

Joanne Segars, chair of trustees at Now Pensions, said: “People with disabilities are one of the under-pensioned groups that we have been campaigning on behalf of for some time.

“We believe it is imperative that we continue to raise awareness of the discrimination that many people go through which has a huge impact on the ability of people to save for their later life. 

“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.”

Now Pensions’ call to remove the £10,000 earnings threshold, and to start pension contributions from the first £1 of earnings, is in line with repeated calls for the government to implement the findings of the 2017 auto-enrolment review.

Though nominally committed to implementing the reforms, the government has not set out when it intends to do so, with pensions minister Guy Opperman having declined to set out a timetable. 

For now, the government has stated that it will revisit the proposals at some point towards the middle of the decade.