Millions of UK employees have reached retirement with a private annual pension of just £3,650, according to research by pension provider Now:Pensions.
Its The 2025 underpensioned report, which was compiled and published in partnership with the Pensions Policy Institute (PPI), also found that almost nine million UK people are significantly under-pensioned, with the data revealing that under-pensioned groups have annual private pension incomes ranging from £3,650 to £6,750. This is 43% to 80% of the £8,500 population average.
Individuals from ethnic minority backgrounds and carers have seen an increase in pension savings since 2022. Despite this, they are still below the population average, with 62% to 80% of total pension saving compared to the UK average.
Among the under-pensioned groups, those with disabilities have the lowest pension income, at just 43% of the UK average, with a private pension income of £3,650 compared to the population average.
In addition, women’s eligibility for auto-enrolment has increased since 2020, rising from 77% to 85% in 2025. Despite this, women are retiring with just 67% of the UK average, and single mothers with just 54% of the average.
Joanne Segars, chair of trustees at Now:Pensions, 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.”
John Adams, senior policy analyst at the PPI, and author of the report, 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.”
