People will still be retiring with insufficient pensions despite reforms to the pension system because the changes ignore people who do not have a full employment history, says the Pensions Policy Institute.
The PPI report says increased redistribution through the state second pension and the rapid expansion of the pension credit will not fully compensate the under-pensioned groups.
The PPI says policymakers assume the stereotypical person has a full working history before retirement when the majority of people do not. More than half of the population are women, increasing to three-quarters of the population aged 75 or older. Two-fifths of all workers are self-employed, working part-time or in temporary jobs and nearly one in 10 people are ethnic minorities.
The PPI argues that all these groups are more likely to have low pension income and, taken together, make up the majority of the population.
The report concludes that any contributory pension system will disadvantage people who are less likely to be in permanent, full-time employment.
PPI research director Chris Curry says: “The structure of the UK pension system means any group with low earnings or an irregular employment record will be disadvantaged and will lose out in retirement.”