What is the Living Pension?
The Living Pension is an independently calculated savings target. It is the amount your employees need to save into a pension each month to be able to cover the costs of basic everyday needs when they retire. Basic everyday needs include food, bills, clothing and the average cost of housing.
Why employees need a Living Pension
Millions in the UK face poverty in retirement. Research shows 4 in 5 workers are not saving enough for an acceptable standard of living in retirement. Today’s cost of living crisis is tomorrow’s pensions crisis – many are unable to save for the future which means they may not be able to retire in the future. And if they do, they may not be able to meet everyday basic needs.
Benefits of being a Living Pension Employer
Being a Living Pension Employer demonstrates to customers, employees, investors and peers that you care about your staff and are one of the UK's leading organisations on good work.
Living Pension Employers have:
Higher employee satisfaction
Increased pension enrolment
Competitive benefits for attracting and retaining talent
How to qualify as a Living Pension Employer:
Being a Living Pension Employer means paying more into employee pensions to help employees meet this target. The Living Pension accreditation shows you’re committed to helping your employees retire well.
You’ll need to:
Pay your employees at least the real Living Wage
Contribute at least 7% or £1720* a year
Ensure a total of 12% or £2950* a year goes into each employee’s pension (up to 5% of this can come from them)
*This is based on a full-time salary for somebody earning the real Living Wage. It would be pro-rated for part-time employees.
You must also:
Be Living Wage accredited
Offer all employees a Living Pension (regardless of age and earnings)
Offer a Living Pension to all contracted workers within 3 years
Communicate to all employees once a year about their pension
Become a Living Pension employer - find out more here: livingwage.org.uk/living-pension