Millions of people in the UK are heading into retirement significantly underfunded compared to the wider population, new data shows.
The 2025 Underpensioned Report, published today by now:pensions in partnership with the Pensions Policy Institute (PPI), found that underpensioned groups have annual private pension incomes of just £3,650 to £6,750. That’s well below the population average of £8,500, leaving many vulnerable to financial insecurity in retirement.
While automatic enrolment has transformed pension savings since its introduction in 2012, bringing more than 11 million additional people into workplace schemes, many individuals still fall through the cracks. Those in underpensioned groups often don’t meet the eligibility criteria for auto enrolment, meaning they miss out on vital retirement savings.
Some progress has been made, with rising eligibility for auto enrolment across several groups. But overall, the problem is far from solved, and many underpensioned workers remain overly reliant on the State Pension.
To address the issue, now:pensions is calling for five key reforms:
- Remove the £10,000 auto enrolment earnings trigger
- Scrap the lower earnings limit on pension contributions
- Introduce a family carer’s top-up
- Ensure pension savings are considered during divorce settlements
- Take stronger action on childcare availability and costs
Carers and people from ethnic minority backgrounds have seen some improvement since the 2022 report, with employment and pension saving rates rising. However, they still lag behind the population average, with pension savings between 62% and 80% of the UK benchmark.
The situation is even worse for people with disabilities, who have the lowest pension income of all groups surveyed. On average, they retire with just 43% of the UK population’s private pension income – £3,650 compared to £8,500.
Women and single mothers continue to face significant barriers too. Although women’s eligibility for auto enrolment has risen from 77% in 2020 to 85% in 2025, they still retire with just 67% of the average pension income. Single mothers fare worse, reaching only 54% of the average.
The self-employed are also struggling, with private pension income again standing at just 54% of the UK average.
Joanne Segars, Chair of Trustees at now:pensions, said:
“Without further policy action, millions will continue to struggle to achieve a secure retirement. Reforms like removing the £10,000 earnings trigger and introducing a family carer’s top-up could help ensure a fairer chance for all workers, regardless of their circumstances.”
John Adams, Senior Policy Analyst at the PPI and lead author of the report, highlighted the need for changes to auto enrolment criteria, suggesting that allowing multiple income streams to count towards the earnings trigger could make a major difference.
Samantha Gould, Head of PR and Campaigns at now:pensions, added:
“Progress has been made, but deep inequalities remain. Many underpensioned groups – including women, carers, disabled people, and those in flexible employment – are still held back by systemic barriers. Lower wages, part-time roles, and caring responsibilities all contribute to the pension savings gap.”
The findings make it clear that while automatic enrolment has had a positive impact, the system in its current form isn’t working for everyone. Without targeted reforms, large swathes of the population will continue to face an uncertain and financially insecure retirement.
This marks the third report from now:pensions into pension saving disparities since 2020. Despite some improvements, the underpensioned groups studied are still falling far behind the rest of the population.