‘Asians get least returns from work pension plans’
Radhakrishna N S
BRITISH Asians received the lowest income from work pensions compared to other groups, according to new government figures.
Asians were also the least likely of all ethnicities to get an income from their occupational pension, leading to calls for more awareness to be raised about saving for the future.
White Britons who have retired had the highest average gross income at £556 a week between 2016 and 2019, compared to £401 a week for people of south Asian origin.
The Department for Work and Pensions data found that black and Asian families were the least likely to earn an income from a personal pension.
And income from funds saved during their working life went down for Asian elders from £78 a week to £69 over the same period.
Ramesh Verma, founder of the Ekta Project charity in London supporting Asian elders, told Eastern Eye: “I was not told about a private pension or plans for my future, I joined a pension scheme late.
“Those that worked in factories were not given information, so they did not plan; they didn’t know how to plan. The [mentality] is ‘it’s okay, we don’t need it, our family will look after us’ – that is a myth now. There is a false perception that the family will look after us, so they didn’t cater for the future life.”
Verma added: “I tell my members to give, but keep something for yourself. They think it is their duty, giving to their children, grandchildren then great grandchildren.”
Last Wednesday (23), it emerged that state pensions will rise next year to protect pensioners from the economic damage caused by the coronavirus pandemic.
A Bill was unveiled on avoiding a freeze on the state pension next April. It underlines the government’s commitment that the state pension rises every year by the highest of wage growth, inflation or 2.5 per cent.
Pensions secretary Thérèse Coffey said it was “only right” people who are retired had their incomes protected as the government had worked hard to protect all age groups during the pandemic.
Amjad Malik, a solicitor based in Rochdale, Greater Manchester, said there are several reasons why Asian elders had the lowest income from their retirement funds.
He told Eastern Eye: “It is well documented that ethnic workers are more likely to be self-employed. Asians have also been shown to have a lower average earning in comparison to other ethnic groups.
“This highlights an area of concern, suggesting that there are systemic flaws in the pension system as a whole. Asian workers tend to resort to self-employed work because of less opportunities in employment akin to their population average in the country and often become unaware of the pension schemes and benefits available to them.
“I urge those who are worried about their pension at whatever working stage they may be at to seek legal advice from pension specialists or with accountants or the Citizens Advice Bureau to gain clarity on their pension scheme and issues such as automatic enrolment.”
Measures in recent years to boost workers’ retirement savings include auto-enrolment, where a person’s employer and the government also put in money. Employees are automatically put into their workplace pension scheme but cannot access the pot until they are at least 55.
From October, the age to receive a state pension will increase from 65 to 66 for both men and women. It is scheduled to rise to 67 between 2026 and 2028. The full State Pension is £175.20 per week, but depends on a person’s National Insurance record.
Jasmine Birtles, founder of consumer website Moneymagpie, said: “The figures do surprise me. It’s a stereotype but Asians families are hardworking and successful on the whole and will be doing quite nicely in retirement.
“I do understand the idea that some will continue to work due to their work ethic. There is a cultural element if ‘I will be looked after my children’. There is a generational element, the view has changed to, ‘I am going to have to look after myself and my children’.
“Parents have realised in recent decades things have turned. In 10 years and 20 years, these figures will be different.”