With many workers squeezed between high living costs and low wages, many are struggling to cover their bills, let alone save for retirement. This leaves future generations of pensioners at risk of living on a low income.
By offering a Living Pension – an independently calculated savings target, based on the real cost of living – employers can cut this risk for their workers. The Living Pension provides a decent standard of living in retirement when combined with the full State Pension. It’s based on a yearly contribution of 12% of all earnings to an employee’s pension pot, or £3,150 of savings in 2025/6, with no more than 5% coming from the employee.
Our latest research shows that a Living Pension can also improve workers’ confidence and optimism about their retirement, improve overall job satisfaction, and encourage people to stay longer in their current jobs.
Many workers face uncertainty in retirement
Our research is based on a poll of 2,000 UK workers paying into a Defined Contribution pension, including 500 workers paid below the Living Wage.
A third (32%) of those we surveyed expect to have to work beyond State Pension age. This includes 10% who don’t think they will ever be able to retire – rising to 15% for part-time workers and workers paid below the Living Wage.
Some workers are also less optimistic about their retirement income than others. For example, two-thirds (67%) of men expect to have an individual income of more than £20k per year in retirement, falling to half (49%) of women.
The good news is that the Living Pension standard can help. 11% of those we surveyed who are saving below the standard think they’ll never be able to retire, but this drops to 4% of Living Pension savers.
Proportion of respondents who expect to retire before, at or after State Pension age.
Source: LWF analysis of Savanta polling, 2026. All respondents were asked: The current age at which you can claim your State Pension is 66. This will rise to 67 by April 2028 and a further rise to 68 is planned for 2046. You don't have to retire in order to claim your State Pension, but many people do. When do you expect to retire in relation to the State Pension age?
Few are saving enough
The bad news is that the majority of those we surveyed aren’t saving enough to build up a Living Pension. 68% of those who shared key information about their workplace pension were saving below the standard.
Those who stand to gain the most from a Living Pension – who are disproportionately likely to be uncertain about their retirement income, and dissatisfied with their current workplace pension – are also the least likely to have one. Women make up just 27% of Living Pension savers, and a disproportionate minority live alone (24%), rent their home (19%), or are disabled (11%).
The overwhelming majority of Living Pension savers are also full-time workers (94%) and paid at least the Living Wage (98%).
The Living Pension can boost job satisfaction and retention
85% of those we surveyed say it’s important that employers contribute enough to their workers’ pension pots to provide a decent living standard in retirement.
That’s reflected in the data we collected about satisfaction with workplace pensions: over half (55%) of those saving below the standard are satisfied with their current pension, but that rises to over three quarters (79%) of Living Pension savers.
Half (50%) of Living Pension savers also say their pension improves their overall job satisfaction, and a third (32%) plan to stay longer with their employer than they otherwise would to take advantage of their pension offer.
Introducing a Living Pension could also improve employees’ wellbeing. Half of those saving below the standard (54%) say moving to a Living Pension would make them less anxious about retirement. Interestingly, 44% would increase their own contributions if their employer accredited, helping to grow their savings even more.
Proportion of respondents who are satisfied or dissatisfied with their workplace pension.
Source: LWF analysis of Savanta polling, 2026. All respondents were asked: How satisfied or dissatisfied are you with the amount your employer contributes to your workplace pension?
Proportion of respondents saving below the Living Pension standard who say moving to the standard would have a positive or negative impact on the following.
Source: LWF analysis of Savanta polling, 2026. All respondents saving below the Living Pension standard (685) were asked: Imagine your main employer increased their pension contributions so you reached this savings standard, with the rest of your work benefits remaining unchanged. What effect, if any, would this have on 1) your overall satisfaction with your current job, 2) the length of time you plan to stay at your current job, 3) your own pension contributions, 4) your level of anxiety about your income in retirement?
A Living Pension supports workers to live well throughout their lives
Overall, this means a Living Pension could help people stay in their jobs for longer, save more, and retire earlier. It could particularly help those who are least likely to be saving enough at the moment, including part-time workers, low-paid workers, and groups facing structural inequalities.
