The People’s Pension, a provider with nearly five million members, in a report said that the pension income gap between a female pensioner from the ethnic minority and a white male pensioner was 51 per cent. The report exposed a sizeable “ethnicity gap” in pensions. The report said that minority ethnic pensioners were, on average, 24% – or £3,350 a year – worse off than other people of their age.
This is not the first time a link has been made between ethnicity and poorer pension incomes. Research by the Pensions Policy Institute (PPI) charity in 2003 and 2008 concluded that people from ethnic minorities, and certain other groups, were more likely to have many of the characteristics associated with lower pension incomes. In 2016 the PPI said it had found that differences in income were reducing, “but some will remain”.
Many of the findings in the study are based on an analysis of a survey of more than 40,000 households carried out by the Department for Work and Pensions. The report said the data showed that pension income inequality was a particular issue for Asian ethnic groups – where the gap was 30% – and for the “black African, Caribbean or black British” groups, where the figure was just under 27%. The report also indicated that average pension incomes for one category – listed as “other ethnic group (Arab, other ethnic group)” – were 6% higher than for pensioners from white ethnic groups.
The researchers said the ethnicity gap was driven by several factors, including lower average earnings, variable employment rates and the greater likelihood of minority ethnic workers being self-employed. Part of the problem was that there was an annual state pension income gap of about £600 for ethnic minorities, they added. For example, DWP data showed that while 98% of white pensioner households received the state pension, it was 85% for Asian pensioner households.
“Our report highlights large inequalities, which will become starker as the growing ethnic minority population reaches retirement age,” said Gregg McClymont, director of policy at The People’s Pension.He said: “Understanding the size of the problem and causes is a vital first step in devising appropriate policies for closing the gap.”
