Living Pension launched to provide security and stability in retirement

New research finds over half of pension savers feel they'll never be able to retire and 1 in 10 cut contributions as cost of living crisis bites.

What is a Living Pension infographic with piggy bank


The Living Wage Foundation has today launched the Living Pension Employer standard, a major new programme to tackle low pension saving amongst low-paid workers. The Living Pension is a voluntary savings target for employers who want to help workers build up a pension pot that will provide enough income to meet basic everyday needs in retirement. It builds on the work of the real Living Wage by providing low-paid workers with stability and security now, and in the future.

The Living Pension savings target is 12% of a worker’s annual salary, of which the employer pays in at least 7%. This builds on auto-enrolment, where the employer is only required to contribute 3%. The Living Pension savings target can also be implemented as a cash amount of £2,550 a year, based on 12% of a real Living Wage worker’s salary. The employer contributes at least £1,448 to this cash amount.

Research by Resolution Foundation completed in 2022 found that 4 in 5 workers (16 million people) saving into defined contribution schemes, and 95% of low-paid workers, weren't saving at levels likely to make ends meet in retirement.

Many employers already recognise the challenge of low pension saving and are stepping up to support their employees. The Living Pension launches with 6 employers signed up to the standard: Aviva; Phoenix Group; Herbert Smith Freehills; Good Things Foundation; Wealthify; and Citizens UK. The standard launches at an event today at the Edinburgh offices of Phoenix Group, with a second launch event on Thursday, 23rd March at Herbert Smith Freehills in London.  

The announcement comes as new Living Wage Foundation research finds that over half of pension savers feel they'll never be able to retire. The research, based on Savanta Comres polling of over 3,000 UK pension savers, found:

  • Over half (56%) feel like they will never be able to retire. 
  • 2 in 3 (64%) feel they will need to work several years beyond retirement.
  • Nearly 2 in 5 (37%) are not confident that they are saving enough to meet even basic needs in retirement. 
  • 9% stopped or reduced contributions in the last 6 months. 
  • 8% plan to cut pension contributions in the next 6 months.
  • 2 in 5 (42%) of those who cut contributions blamed rising living costs.

Katherine Chapman, Director of Living Wage Foundation, said: “Low pension saving levels are a long-standing issue and our research shows that workers are worrying about an uncertain future. The current cost-of-living crisis is exacerbating the problem. Struggling to make ends meet as living costs soar, many workers are unable to prioritise pension saving, which risks storing up a future crisis of millions unable to afford even the basics in retirement. 

"Over the last ten years the Living Wage campaign has grown in strength and numbers. Now paid by over 12,000 employers, it delivers essential pay rises to over 450,000 workers every year. The Living Pension builds on this by encouraging employers to do more to help their workers build a pension pot that meets basic everyday needs in retirement, providing stability and security for workers now, and in the future.” 

Nigel Peaple, Director of Policy and Advocacy at the Pensions and Lifetime Savings Association (PLSA) said: “I am very pleased to support the Living Pension which seeks to encourage better pensions and higher employer contributions, especially for employees on a modest income. The new initiative, alongside existing measures like the Retirement Living Standards and the Pensions Quality Mark, helps employers and employees identify good provision.”

Danny Harmer, Chief People Officer at Aviva, said: “By adopting the Living Pension and paying the real Living Wage, organisations can help their people balance saving for tomorrow with living for today. Aviva is proud to be amongst the first companies to offer the “Living Pension” to our own employees and, as one of the UK’s leading pension providers, we are raising awareness with our clients too, so that more people have a decent standard of living when they retire.”

Andy Curran, Chief Executive of Standard Life, part of Phoenix Group, said: “It’s critical that people are saving enough towards their retirement, and we know that employers have an important role to play in ensuring that the right foundations are laid for their employees’ retirement. As the UK’s largest long-term savings and retirement business, Phoenix Group is proud to be one of the first employers in the UK to sign up to the Living Pension accreditation which is a really good initiative. We urge other businesses, who can, to also sign up to help ensure everyone can have enough income to meet their everyday needs in later life.”

Alison Brown, Executive Partner at Herbert Smith Freehills, said: “The cost-of-living crisis has highlighted the stark difficulties faced by far too many individuals who struggle to manage financially on a daily basis. These challenges could get worse, with many people not saving enough for their future. Being a responsible employer is about more than ensuring staff are looked after whilst they work for you; it is about recognising that providing employees with stability and security in retirement is just as important.”
"We are delighted to have supported the Living Wage Foundation in developing the new Living Pension standards and are proud to be one of the first companies in the UK to be accredited as providing our staff with access to a Living Pension.”

Adam Barlow, Assistant Director of Finance at the Good Things Foundation, said: “At the Good Things Foundation, we are very proud to have signed up to a Living Pension, as we want to provide security and stability for our amazing staff not just now, but in the future. We believe it's important to ensure our staff receive a pension that meets the real cost of living and delivering the Living Pension truly demonstrates our position as a caring employer with a market-leading offer.”

Andy Russell, CEO, Wealthify said“We’re happy to commit to the Living Pension to ensure that all our employees receive the support needed to live a comfortable and fulfilling retirement. It is essential to Wealthify that we ensure financial wellbeing for our people.”

Mubin Haq, Chief Executive of abrdn Financial Fairness Trust said: “Good progress has been made on pensions in recent years, especially the introduction of auto-enrolment and the triple-lock. Some might think job done, but we are storing up future problems as millions are not saving enough towards their retirement: four in five workers on defined contribution schemes are falling short of what they need to have a decent standard of living in old age. A living pension provides employers with a model to do the right thing and ensure their workforce are not facing hardship in the future.”

Media contact: / 07507478967


Data is Living Wage Foundation analysis of Savanta polling. The data comes from an online survey of 3,059 UK working adults who paid into a pension in the last 12 months, carried out between 17th and 27th February 2023. Data were weighted to be demographically representative of UK working adults by age, gender and region. Savanta is a member of the British Polling Council and abides by its rules.