Workers earning between £10,000 and £20,000 a year who lost income during the pandemic have missed out on a collective £122m in pension savings from their employers, according to research from Scottish Widows.

The pension provider has called for urgent reforms that would entitle those on lower incomes to continue receiving contributions from their employer, if they are unable to meet the costs of employee contributions during a period of financial hardship.

Almost a third of those earning £10,000 to £20,000 per year (31%) have reported a decline in their finances during the pandemic, while 18% have experienced a drop in income, the findings revealed.

According to the latest Scottish Widows Retirement Report, which quizzed a total of 5,059 adults, over half (54%) are now concerned about running out of money in their later years, and 23% are expecting to “work until they drop”.

As a result of job and income losses, Scottish Widows has estimated that low earners will have missed out on a combined £122m in pension contributions from their employers during COVID-19 – a figure that almost triples to £325m when including personal contributions.

Scottish Widows head of policy, Pete Glancy, commented: “COVID-19 has had a massive impact on the nation’s finances, particularly on those who were already struggling financially. Those working from home have benefited from reduced commuting costs and everyday expenses, allowing them to boost their savings.

“But those on lower incomes – and less likely to have worked at home during the pandemic – have seen their finances hit hard and are leaning on savings to cover bills and short-term needs.”

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