Assessment of workers’ pension saving against living pension benchmark
How many people are on track to have a decent standard of living in retirement?
New research from Living Wage Foundation, funded by the abrdn Financial Fairness Trust and completed by the Resolution Foundation, looked at the scale and impact of pensioner poverty, polling amongst low-paid workers on their pensions, and an assessment of how many people are not on track to reach the Living Pension standard.
It found that:
- Four in five workers (16 million people) are not saving enough to meet their needs in retirement
- Low-paid workers are least likely to be saving enough, with fewer than five per cent saving at a rate which would provide an adequate standard of living in retirement
- Low savings levels are a long-standing issue, however, the cost-of-living crisis is exacerbating the problem
- 23% of male workers met the ‘whole career’ Living Pension cash benchmark, compared to 15% of female workers, and that this is driven principally by differing levels of pay rather than differing saving behaviour
- 55% of workers in the finance industry save at or above the ‘whole career’ cash LP benchmark, compared to only 2% of workers in hospitality
In light of the research, the Living Wage Foundation is calling for the development of a new ‘Living Pension Standard’. The Living Pension is currently being piloted with a number of employers and the initiative is funded by abrdn Financial Fairness Trust.