Retirement crisis looms as older Britons at risk of being 'under pensioned' as savings slashed

The comprehensive study demonstrates that employment rates have fallen overall, whilst underpensioned groups continue experiencing significantly lower employment levels and higher rates of part-time work compared to national averages.

These workplace inequalities directly affect pension provision and entitlement, creating substantial gaps in retirement security for millions of workers across the country.

Data reveals that disabled people face particularly severe employment disadvantages, with only 54 per cent in work compared to 82 per cent of non-disabled people - a gap of 28 percentage points.

Analysts note this dramatic disparity in labour market participation directly impacts their pension accumulation throughout their working lives.

Beyond employment rates, income inequalities compound the pension crisis for underpensioned groups. Women's average earnings remain 18 per cent below the population average, significantly reducing their capacity to build adequate retirement savings.

Housing inequalities further exacerbate these challenges, with lower homeownership rates amongst underpensioned groups meaning many face ongoing rental costs throughout retirement, eroding their already diminished pension incomes.

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Automatic enrolment eligibility varies dramatically across ethnic minority communities, despite overall rates matching the general population when all groups are combined.

The research shows Indian employees achieve 96 per cent eligibility for automatic enrolment, whilst Bangladeshi workers face the lowest rate at just 65 per cent.

These disparities in pension scheme access create vastly different retirement outcomes within ethnic minority communities, the Pensions Policy Institute found.

Disabled employees who are in work face additional barriers, being five per cent less likely to qualify for automatic enrolment than the average worker, compounding the pension gap created by their significantly reduced employment rates.

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John Adams, Senior Policy Analyst at the PPI, said: "This year's Underpensioned report builds upon the foundation of previous years, allowing us to start to view ongoing trends as well as monitoring recent the levels of access to pension savings for different groups."

He emphasised the severity of the disability pension gap: "People with disabilities continue to be some of the people most likely to be under pensioned."

Adams also highlighted the complex picture for ethnic minorities: "People from ethnic minority backgrounds have very diverse outcomes, some ethnic minorities are significantly under pensioned compared to the general population, whereas others are much less likely to be employees or have income levels that enable them to be automatically enrolled into pension savings."