Nearly six in 10 people (59%) in the Black community fear running out of money in retirement, a new survey has found.

A quarter (25%) say that they do not have a personal or workplace pension and expect to rely on non-pension savings and cash.

Scottish Widows, which carried out the survey for its latest Retirement Report, says the figures point to a “long-term savings crisis” for the black community.

Nearly one in five (16%) Black respondents stated they had reduced their retirement contributions due to the cost of living crisis and 12% have recently cut back on essentials to try and increase savings. 

In contrast, just under half (49%) of the Indian community and 53% of White Britons were concerned about running out of money in retirement. 

Scottish Widows’ says the survey suggests significant variation between the black community and other groups when it comes to retirement and long term savings. 

The survey found that one in five (16%) Black adults have said they will cut back on their retirement contributions, compared with only 11% of White Brits and 14% of Asian groups. 

Black African, Black Caribbean or other Black ethnic groups are also less likely to have a state pension (36%), compared to their White British counterparts (58%). 

Scottish Widows says that the cost-of-living crisis means that some ethnic groups are showing deteriorating financial resilience. It also cited the Financial Conduct Authority’s recent Financial Lives Survey which found that more than a third of Black Britons have low financial resilience, compared to only 19% of those from a White background.

According to Scottish Widows’ report, the Black community reported a larger strain due to rising living costs, with nearly half (48%) reporting a greater level of concern over the cost of living, compared to just over a third of their White counterparts (36%). 

The Scottish Widows report also revealed significant variations in how different ethnic groups typically expect to support their retirement, with those in the white British group much more likely than minority ethnic groups to see state pensions (58%) as sources of income to fund retirement. This is compared to only 36% of the Black community and 25% of Pakistani groups who ticked state pensions. 

Savings outside of a pension, and in cash, were also more likely to be cited as sources of retirement income for Black communities (30%), as well as support from children and family (11%). In comparison, only 2% of White British respondents mention family and friends as sources of retirement income. 

Pete Glancy, head of policy at Scottish Widows, said: “Our research highlights inequalities in terms of pension provision across Black communities, and the increased challenge of making ends meet today and saving for the future. 

“Those with the best pension provision have spent much of their careers in well-paid, full-time jobs. Those with the poorest pension provision tend to have intermittent, low-paid employment or earn their wages from multiple jobs, which means they can lose out on being automatically enrolled in an employer led pension scheme. Black communities appear to be over-represented in the latter category, which can impact on the accumulation of private pension provision and State Pension entitlement. 

“There is also some evidence that people from Black communities are more likely to use means other than a traditional pension to save for retirement, such as cash savings. This can be a risky strategy particularly during times of higher inflation.” 

Kia Commodore, founder of financial literacy platform Pennies to Pounds, said: “The stats in the report about Black communities are shocking but sadly, unsurprising. The rise in the cost of living has undoubtedly affected the choices that many people are making regarding their finances. 

“In my experience, there are a few reasons why the Black community may not be as inclined to save for a pension. One is that Black employees typically earn less than their White British counterparts and do not always have the additional disposable income to save into a pension. There is also a feeling of distrust towards financial institutions which, in-turn, can impact the financial decisions made by some members of the Black community.” 

•  YouGov interviewed 5,025 adults aged 18+, weighted to be representative of the GB population, and separately for 1,002 adults aged 18+ to better understand the retirement prospects of minority ethnic groups. Fieldwork was carried out in March 2022.