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Individuals from certain minority ethnic groups in the UK, such as those from a Pakistani and Bangladeshi background, are among those considered to be ‘under-pensioned’, meaning they are less likely to have adequate pension protection in later life. As part of a recent research project at the Centre for Research on Ageing in the University of Southampton, funded by the ESRC’s Secondary Data Analysis Initiative, we tried to gain a better understanding of the evidence. The research team included myself, Dr Frank Feng, Professor Maria Evandrou and Professor Jane Falkingham.

We tried to understand the differences between and within ethnic groups in terms of occupational pension membership and the receipt of different types of pensions in later life.

There are three main reasons why researching this topic is important and has important policy implications:

Firstly, pension protection is part of a cumulative disadvantage faced by certain ethnic groups including health status and financial wellbeing.

Secondly, the UK is becoming more ethnically diverse.

Thirdly, the minority ethnic population is ageing alongside the White British population and therefore pension protection will become an increasingly pressing policy concern.

The pensions landscape is changing fast in the UK, and today’s older people can expect an amalgamation of their benefits into a single universal credit. In our analysis, we distinguished between the receipt of state pensions, occupational/ private pensions and the Pensions Credit, all of which represent different elements of pension protection.

Policy reforms in the area of occupational pensions are also underway, with the employers of larger companies becoming automatically enrolled in occupational pension schemes, followed by medium and smaller companies by 2018.

Although such reforms can make a significant difference in the number of older people who are eligible to receive pension income, and in the number of employees covered by occupational pensions, it remains to be seen whether existing differentials among the older population, and the employment patterns of men and women from certain minority ethnic groups, will continue to pose a challenge in terms of their adequate pension protection.

The project uses data on working-age individuals from the UK’s largest longitudinal survey called ‘Understanding Society’, which also includes sample boosts for five prominent minority ethnic groups: African, Black, Pakistani, Bangladeshi and Indian. For the working-age population, we were also able to distinguish Polish individuals in the population, which allowed us to compare more and less ‘traditional’ groups of migrants to the UK.

For the working-age population, we found that coming from a minority ethnic group compared to the White British majority can adversely affect one’s chances of being in paid work in the first place; their chances of being an employee (as opposed to self-employed), and working for an employer who offers a pension scheme. This part of the analysis was published in Social Policy & Administration. For the older population, we found that coming from certain minority ethnic groups makes one less likely to receive a state or occupational/private pension, and more likely to receive the Pension Credit, compared to a White British person. This part of the analysis was published in Ageing & Society.

These results confirmed existing evidence which tells us that the Pakistani and Bangladeshi groups, and especially women within these groups, are the least likely to fare well across these indicators.

Among the working-age population, the only minority group who were more likely than the White British to be in paid work was the Polish group, reflecting the largely economic nature of migration among Poles settling in the UK. We found that although Poles are the most likely to be in paid work, nevertheless they are still less likely to work as employees or for an employer who offers a pension scheme. Such complex employment patterns could mean greater pension insecurity during working age, which can result in income insecurity in later life.

The findings of our research have important implications for the design of policy aimed at improving pension protection for minority ethnic groups. On the one hand, they confirm important differentials between the White British majority and the minority ethnic population in terms of employment patterns and pension protection, as well as between different ethnic groups. On the other hand, our research suggests that pension protection continues to be a challenge for younger cohorts of individuals from minority ethnic groups, which implies that social policies encouraging better occupational pension protection for a diverse workforce are critical.