Less than half of the working age population is eligible for auto-enrolment, with 23 per cent of employees ineligible according to the Pensions Policy Institute.
The research body says 20.1m UK workers between the ages of 16 and 64 are eligible for auto-enrolment, compared to 5.3m employed who are ineligible, 4.5m self-employed, 1.8m unemployed and 9m economically inactive.
By the end of June 2015, 20.2 million workers had been assessed for eligibility. Of these 9.3m were already active members of a qualifying pension scheme, while 5.3m were automatically enrolled into a workplace pension scheme and 5.2m were found ineligible for auto-enrolment.
Women are less likely than men to meet the qualifying criteria for automatic enrolment. Of 13m employed women in the UK, around 4m – 32 per cent – do not meet the qualifying criteria for automatic enrolment, compared to 16 per cent of male workers. The PPI says more women would qualify for auto-enrolment if second jobs were included in the assessment.
The research found people from some ethnic minority groups are more likely to earn below the National Minimum Wage (NMW). While 3 per cent of white workers earn below the NMW, 5 per cent of Black African and Indian workers, 11 per cent of Pakistani and Chinese workers and 18 per cent of Bangladeshi workers do.
The likelihood of meeting the automatic enrolment qualifying criteria is not evenly spread across the workforce. Some groups, for example, Bangladeshi, Pakistani and Black/ African/Caribbean employees, women, people with disabilities, careers and people who work for small employers or people working in the service industry are far less likely than other employees to meet the qualifying criteria. This should be a matter of concern to policy makers as automatic enrolment is now reaching its third stage and smaller employers are starting to automatically enroll their eligible employees.
PPI director Chris Curry says: “The policy community will need to closely watch whether certain groups are in danger of being excluded from automatic enrolment, and discussions should be held about whether there are potential policy levers which need to be put in place to ensure greater equality of coverage.”