Living Pension

Providing workers with security and stability in retirement

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 the 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. 

* based on a Living Wage salary for 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. 

Download our one-pager on our Living Pension accreditation.
 

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, paying into defined contribution schemes are not saving at the level needed to reach 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. 

 

Our methodology

Read for more information on our methodology for calculating the Living Pension standard, including the aims, assumptions and testing that went into creating it, and how it will be monitored and reviewed in future years.

Read more

How do we sign up? 

There are five key stages to becoming a Living Pension employer: 

  1. Review the pension contributions offered to all directly employed staff 
  2. Collate and document pension contributions for all third party contracts  
  3. Work with Living Wage Foundation to identify changes needed 
  4. Make changes to pension plan and agree milestones  
  5. Accredit in the Living Pension and celebrate! 

If you are interested in becoming a Living Pension employer, please register your interest here. We will then send you further information and a short questionnaire to establish your current pension provision to assess the level of support you need from there.  

We are in the early stages of understanding how organisations can operationalise Living Pension, particularly for third party workers, and welcome the input of employers who want to go further to provide security for workers in retirement.