A young person disabled before entering the workforce could retire with a pension pot more than £245,000 smaller than their non-disabled peers, according to research by PensionBee.
This retirement gap was found to be due to constrained earnings, low pension participation and higher later-life costs.
Finds from the PensionBee study include that 91 per cent of disabled people worry about their future financial security, and that 54 per cent worry ‘a lot’.
Of the respondents, 84 per cent say disability has negatively impacted their ability to save. Also 46 per cent became disabled before age 30, meaning that nearly half faced financial barriers before their careers began.
Becky O’Connor, head of pensions at PensionBee, says: “The impact of disability on long-term finances is profound. Disabled people face a ‘quadruple whammy’ affecting their retirement prospects and needs: constrained earnings and reduced labour market participation; the need to work longer despite health limitations; likely higher care costs later in life; and a greater likelihood of renting rather than owning in retirement.”
One in four people in the UK are now disabled, up from one in five a decade ago.
The PensionBee study coincides with the publication of the Second Pensions Commission interim report. This report found that disabled people are among the groups facing persistent structural barriers to pension saving and future retirement adequacy and that over half of disabled people at age 46 have no pension wealth at all.
The PensionBee report combines original survey data from more than 900 disabled people across the UK and has also been released against the backdrop of the ongoing Timms Review, the Government’s research mission into the lived experience of disabled people and how disability affects their ability to learn, work and earn.
This government review is led by Stephen Timms, minister for social security and disability and a former pensions minister.
In its reporting, PensionBee modelled three scenarios using median earnings assumptions derived from ONS Disability Pay Gap data for full-time and part-time workers, examining the impact of disability onset in childhood, age 30 and age 50.
