Black individuals in the UK expect to enjoy nearly five more years in retirement and receive £8,000 more in annual pension income than the UK average, despite facing a 14.8 per cent ethnicity pay gap, Barnett Waddingham research has revealed.

The report, The Ethnicity at Retirement Reckoning, revealed that Black individuals anticipate an average retirement income of £28,953 per year, significantly above the UK average of £20,435.

Ethnic minority individuals overall expect £23,549, while Asian respondents project £19,578.66 annually.

In terms of retirement duration, ethnic minorities generally estimated an average retirement of over 20 years, with those of mixed backgrounds expecting the longest period, just over 21 years.

Meanwhile, Asian individuals anticipated around 18.5 years in retirement and just under 17 years for those of a non-ethnic minority background and 18 years for the UK average.

Despite well-documented disparities in earnings, confidence in financial security post-retirement was also higher among ethnic minority groups.

The majority (77 per cent) of Black individuals were confident they would retire with a comfortable income, compared to 70 per cent of ethnic minority individuals overall and 59 per cent of the UK average.

Meanwhile, 67 per cent of Asian individuals and 57 per cent of mixed ethic individuals said the same.

Additionally, ethnic minority groups showed “significantly” higher engagement with pension investment decisions, with 51 per cent having made active changes, double the UK average.

Knowledge about how their pensions are invested was also higher among ethnic minority individuals (35 per cent) compared to the UK average (26 per cent).

The report also showed a difference in the number of ethnic minority individuals who want to start their own business in retirement (16 per cent) compared to white people (5 per cent).

This increases to 24 per cent for Black respondents who expect to be the most entrepreneurial at retirement.

Barnett Waddingham suggested that ethnic minorities place a “stronger” emphasis on family considerations when planning for retirement, thinking not just about their future but also the financial well-being of their children and parents.

Indeed, the research found that Black individuals have the highest levels of family planning (45 per cent) and support for children (45 per cent).

“Our data also shows that ethnic minority individuals are more likely to have fully considered the possibility of providing urgent financial support for their parents and children within their retirement planning,” the report said.

“This highlights a greater sense of financial responsibility across generations, with certain groups displaying even higher levels of preparedness and awareness.”

---