The £3,350 pensions gap

Get straight to the good stuff every day with the Multiply Minute; a lightning-quick round-up of the money news and how it affects you.

Note from the team: our edit will always include a balance of headlines to keep you in the loop with the money news. But this week, we’ll be paying particular attention to stories concerning black people and their finances, here and across the world. #BlackLivesMatter.

Mind the pensions gap

Retired people from black, Asian and minority ethnic (BAME) backgrounds are £3,350 worse off per year than white pensioners the same age. Research published in January this year found a 24% gap in annual pension income. What’s going on? Firstly, not all households receive the state pension. Other factors feeding the pensions gap include a disparity in earnings and higher rates of self-employment among BAME workers.

Coronavirus job losses

The employment rate among BAME workers dropped from 72% to 67.4% in April in the fallout from coronavirus. That’s a much bigger drop than for white workers. Data shows white people are more likely to have been furloughed, while their BAME colleagues struggle with redundancy or having their hours cut.

Cash boost for debt charities

Households that have suffered a loss of income are increasingly turning to debt to cover the shortfall. Charities such as StepChange have warned of a £6 billion “debt tsunami” facing low-income families. The government has announced £37.8m in additional support for the charities working to get people back to financial health.

Adviser comment: If you find yourself in this position, there’s help out there. For details, check out our recent series on dealing with debt.

Goodbye coal and oil?

Tomorrow the UK will complete its second coal-free month in a row. That’s huge: a decade ago, we got 40% of our electricity from burning coal. Demand for oil is falling too. So much so that BP has announced it needs to cut 10,000 staff worldwide by the end of the year. It’s not just coronavirus; there’s been huge investment in renewable energy in recent years and now Big Oil is also trying to swerve towards renewables.

Adviser comment: You never know when redundancy could affect your own situation, which is why it’s essential to build up an emergency fund to help you through potentially difficult times.