Living Pension

The Living Pension standard builds on the work of the real Living Wage by providing stability and security for workers now and in the future.

It is a voluntary savings target for employers, to help workers build up a pension pot that will provide enough income to meet basic everyday needs in retirement. It is independently calculated based on the real cost of living.

The standard sets out the minimum annual contribution required through an average working life to reach this savings level and employers commit to making sure all workers can access this.

What is a Living Pension?

The Living Pension accreditation is open to all accredited Living Wage Employers. To become a Living Pension Employer, organisations must provide a Living Pension savings level, using either a cash or percentage target.

Annual saving benchmark of £2800

This equates to 12% full-time Living Wage Salary

* based on a Living Wage salary for a 37.5 hour week

The Living Pension must apply to all directly employed staff (regardless of age and earnings) and, over time, third party contracted staff within scope of the Living Wage. As well as making the minimum savings level available for existing employees, all new employees should automatically be enrolled on the Living Pension at least.

As part of the accreditation, employers must also agree to provide an annual communication on the Living Pension to all employees, and a template will be provided to support this.

Why do we need a Living Pension?

Research completed by the Resolution Foundation in 2022 showed that four in five workers, and 95% of low-paid workers, are not saving at a level likely to deliver an acceptable standard of living in retirement.

Those on low pay are being hit hardest, with many struggling to keep their heads above water today, as well as worrying about an uncertain future. By introducing a Living Pension alongside the Living Wage, employers can help employees meet the real cost of living today and in the future.

Many employers already recognise the challenge of pension adequacy and are stepping up to support their employees. We launched the Living Pension standard in March 2023 with 6 employers accrediting.

Those employers ranged from large multinational firms; Phoenix Group, Herbert Smith Freehills and Aviva, to small charities and businesses; Good Things Foundation, Wealthify and Citizens UK.