Citizens UK (Living Wage Foundation)

Project summary

Scaling up the number of employers offering a Living Pension and building the case for employers to contribute above auto-enrolment rates.

Context

Pensioner poverty had been in decline but has seen a resurgence in recent years. Today there are 1 in 6 pensioners in poverty.

In 2012, the government introduced auto-enrolment, a major policy change, to ensure more people build up employer pension pots via minimum contributions (currently at 5% for employee and 3% for employers) Auto-enrolment has been hugely successful.

However, the new system remains much less generous than defined benefit pensions. Communication challenges also mean auto-enrolment minimum contribution levels are seen as enough to provide a decent pension on retirement. This, coupled with a general lack of understanding about saving for retirement, means that today’s savers may not have enough to meet the cost of living in their later life, increasing pensioner poverty in the future.

Living Wage Foundation has worked with low paid workers, pensioners, trade unions, and campaigners on the new standard, including the potential immediate and long-term impact for those in low pay and how feasible it would be to implement and to build support. It will also worked with employers about what they are already doing, how feasible it would be to implement for their lowest paid staff (including contracted out workers), and whether there is appetite for a Living Pension standard.

Finally, it tested and developed the right support process and recognition model and equip its team to support employers adopting a Living Pension standard.

Project overview

The first phase of the work with the Living Wage Foundation piloted the standard amongst a number of employers. This project will scale up the number of employers offering a Living Pension and build the case for employers to contribute above auto-enrolment rates.