Does this refer to either those who have been saved, or those who are not yet saved?
According to this passage of scripture, the “ultimate” judgment of the people who live according to the flesh and not walk in the Spirit of God is they will not inherit the Kingdom of God. The bible teaches clearly that un-regenerated (unsaved) man cannot please God in any way. All of the “works” of an un-regenerated man (according to Isaiah 64: 6) are like “filthy rags” in the view of God. Now according to the Word of God, there is no question (at least in my mind) that verse 21 in this passage does not refer to "the saved", but to those who are "unsaved". The “controversy” as to whether this passage of lost "inhertiance" refered to "the saved" as opposed to "the unsaved" depends upon the right interpretration of what Apostle Paul wrote to the Galatian church as the apostle addressed the moral and spiritual issues occuring within that church and in the churches in general. In general, Paul either wrote exhortations to members within the various church bodies, exhorting the members of these churches to continue in faith on the path that God had set for them through Jesus Christ, or he was in some way or another attempting to vindicate his ministry from the vicious criticism from Judaizers and other “religious” factions that staunchly stood against the Doctrine of the Grace of God he both preached and taught.
In 1 Corinthians 6:9- 11, Paul wrote the same warning to the church at Corinth. The “key” verse in this passage is verse 11. Paul said in that verse that the people whom he addressed in verses 9 and 10 were in God’s eyes “wicked”, and cannot inherit the Kingdom of God but, out of those who were wicked, he isolated a group of people in the Church at Corinth who were now converted in Jesus Christ, that were once wicked, but now in the" eyes" of Christ are now “washed”, sanctified, and justified in the name of Jesus. They were no longer considered in the eyes of God “wicked”. Paul taught that all changes come over the course of time (through sanctification) as we walk more in the Spirit of God and no longer live according to the flesh.
In Ephesians 5:5, Paul said in order to inherit the Kingdom of God, we have to become “imitators” of God, because as it was written, no idolater, no impure person, no sexually immoral person, no greedy, no foolish talking, or the like will inherit the kingdom of God. Paul furthers prove that those he spoke of were not saved by saying to the Church of Ephesus that they(in the Ephesian church) were at one time also living in darkness... TRANSLATE: they were at that time unsaved and living totally contrary to the Word of God. But now, because they embraced and accepted Jesus Christ as their personal Savior through faith after hearing the gospel, they were now “children of light”.
The passage (5:16-21) in the Book of Galatians addressed the same thing. When we live guided by the Spirit of God, all of those works of the flesh listed in this passage are things that we were either saved from or (because we are now saved) currently being systematically delivered from througfh the process of "Sanctification". If a person still live their personal life according to the flesh (the carnal mind), that person will continue to live in sin and will ultimately become completely morally and spiritually depraved unless they give their life to Jesus Christ. Paul further implied that a person who continued in these immoral and depraved acts can’t possible be saved. because he wrote to another church "if any one is truly in Jesus Christ, they are in fact a “new” creation! (2 Cor. 5:17) The old man has passed away (in the sense that the old carnal nature is not in control anymore) and God has in fact made them brand new (they are now controlled by the Holy Ghost). A person who’s saved no longer desires to actively continue to live a sinful life. An unsaved person will continue to sin and as stated earlier continue to get progressively worse.
The important thing to remember is....If a person truly has a change of heart, their behavior will change as well.
The other "important thing to remember is.... the phrase “ the Kingdom of God”refers to God’s sovereign reign in totality here on earth as well as in the heavens, especially in the coming dispensation of the "Ages of Ages" when Jesus will hand over all of the kingdom on earth to God the Father that God may be all and in all! Third, Paul identified “the Kingdom of God” as joy, peace and righteousness in the Holy Spirit.
There will come the time in the dispensation of the Ages of Ages when the heavens and the earth will be at total peace, the joy of the Lord will be upon all who submitted to him throughout the previous ages and accepted Jesus Christ as their Lord and Savior. The "Righteousness of God" will be all that every child of God will know and experience in their life for all eternity. The “unsaved” who died never accepting Jesus Chris as Savior and Lord, who never committing their lives to the will and way of God, whether in the past, present or future dispensations before the advent of the Ages of Ages will never ever inherit this kingdom. This is equally as true in reference to the Paul’s meaning of the Kingdom of God. Anybody who refuses to walk in the Spirit of God and continues to walk in the flesh will not inherit this “kingdom” either. Until they do, they will never experience the "Joy of God", that "peace of God" which passes all understanding, nor will the "Righteousness of God" ever rest upon them.
In conclusion: in all three passages of scripture, the central message Paul conveyed to the church was every believer needed to walk in the Spirit of God because God is a spirit and true worship to God comes only by worshiping him in spirit and in truth. When we do so, we not only experience the Kingdom of God in "sanctified progression" like Paul spoke of (joy, peace, and righteousness) but, as we stay on the path and continue to walk in the Spirit of God, one day, when this life is over, we will live for all eternity in the Kingdom of God where everyone and everything will be at peace and in harmony with Jesus and God and God will be all and in all.