More than half of single mothers left out of workplace pensions schemes, analysis reveals

Experts urge the government to reform auto-enrolment scheme as part of wider drive to address in-work poverty

More than half of single mothers do not qualify for auto enrolment pensions, research has revealed, leading to calls for “urgent support” to tackle the barriers single mothers face.

An analysis of official data, conducted by NOW:Pensions and the Pensions Policy Institute (PPI), found 58 per cent of single mothers are not being automatically enrolled into a workplace pension because they earn below the qualification threshold. This was up from 45 per cent in 2020.

The poll also found that the average pension wealth for single mothers dropped by 40 per cent since the start of the pandemic, with the average private pension income for single mothers now just £11,000 a year on retirement – down from £18,300 in 2020.

The findings were based on several surveys, including the Family Resources Survey, the Labour Force Survey and the Wealth and Assets Survey.

The research suggested single mothers might be missing out on workplace pensions because they are more likely to work part time.

Employees are placed in a workplace pension when they earn at least £10,000 in a single role, however the research found that just over half of single mothers (54 per cent) worked part-time, compared to 21 per cent of the UK as a whole, meaning their earnings were less likely to meet the qualifying threshold.

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Lauren Wilkinson, senior policy researcher at the Policy Pensions Institute, said higher levels of part-time work, lower levels of pay and greater demands on their income as the sole earner in their household, meant single mothers faced greater challenges saving for retirement.

“Greater access to flexibility in employment could help to close the gender pensions gap especially for single mothers by increasing labour market engagement and providing a greater ability to balance this with childcare responsibilities,” she said.

This was echoed by Victoria Benson, chief executive of charity Gingerbread, who said single parents faced “near insurmountable barriers” to securing work that paid enough to allow for a decent living.

“This new research shows that for many single mothers, chronic low income will persist well into retirement,” she said, calling for “urgent support” to help single parents secure flexible and sustainable jobs that work around caring commitments.

The CIPD is among a number of organisations calling for changes to auto-enrolment pensions as part of a wider action from businesses and the government to address in-work poverty.

“The government should commit to reforming pensions auto-enrolment and lay out a timetable of when these changes will be made,” said Charles Cotton, senior performance and reward adviser at the CIPD. “An example of one change we want to see is a reduction in the lower age limit of when people will be enrolled, from 22 down to age 18.”

Samantha Gould, head of campaigns at NOW:Pensions, also called for pension reform, and said removing the minimum earning threshold could see an additional 200,000 people auto enrolled into workplace pensions

“We must ensure that everyone has an equal opportunity to save for their futures and build an adequate savings pot for later in life,” she said.

The CIPD recently released guidance for employers looking to tackle in-work poverty.