More than half of single working mothers (58%) are ineligible for automatic enrolment into a workplace pension, according to new survey findings, which is an increase from 45% in 2020.
The research, conducted by pension provider Now: Pensions and The Pensions Policy Institute to coincide with National Single Parent Day (21 March), revealed that the average pension wealth for single working mothers, of which there are currently under one million in the UK, has dropped by 40% since the start of the Covid-19 (Coronavirus) pandemic.
The data found that the number of single mothers working part time has increased to 54% compared to the UK average of 21%. As pension saving is triggered once an employee earns at least £10,000 in a single role, this means that some of these workers might not meet the eligibility criteria.
Currently, single mothers reach retirement with a private pension income of just £11,000, which is far less than the Pensions and Lifetime Savings Association’s suggestion of a £20,200-a-year income for a moderate lifestyle during retirement.
Samantha Gould, head of campaigns at Now: Pensions, commented that it was troubling the majority of single mothers were being locked out of workplace pension savings, with single mothers reaching retirement age with the lowest pension wealth on record.
She explained that this perpetuated the current pensions’ gaps experienced by some groups in the UK, which need to be addressed.
“With the majority of single mothers now locked out of workplace pensions, we are calling on the government to make policy changes and remove the auto-enrolment trigger of £10,000 and starting contributions from the first £1 of earnings,” Gould said.
“This would bring an additional 200,000 single mothers into workplace pensions and increase women’s pension financial security in retirement. 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 added.
