Pension prospects of minority ethnic groups: inequalities by gender and ethnicity

Minority ethnic groups have low income in later life from private pensions, partly due to shorter employment records in Britain since migration. Yet disadvantage and discrimination in the labour market, as well as differences in cultural norms concerning women's employment, may lead to persistence of ethnic variation in private pension acquisition. Little is known about the pension arrangements made by men and women in minority ethnic groups during the working life. This paper examines the extent of ethnic disadvantage in private pension scheme arrangements and analyses variation according to gender and specific ethnic group, using three years of the British Family Resources Survey, which provides information on over 97,000 adults aged 20-59, including over 5,700 from ethnic minorities. Both men and women in minority ethnic groups were less likely to have private pension coverage than their white counterparts but the extent of the difference was most marked for Pakistanis and Bangladeshis. Ethnicity interacted with gender, so that Blacks showed the least gender inequality in private pension arrangements, reflecting the relatively similar full-time employment rates of Black men and women. A minority ethnic disadvantage in private pension coverage, for both men and women, remained after taking account of age, marital and parental status, years of education, employment variables, class and income. The research suggests that minority ethnic groups - especially women - will be disproportionately dependent on means-tested benefits in later life, due to the combined effects of low private pension coverage and the policy of shifting pension provision towards the private sector.