Can low paid workers afford to retire in today’s world?
With people now expected to live 20 years plus in retirement, many are reliant on retirement savings for the equivalent of 50% of their working life – how can we, as employers, support them in saving enough?
One fifth of today’s pensioners are living in relative poverty, this is despite the state pension and the historic provision of “gold-plated” defined benefit pensions. As much of the public and private sector move towards defined contribution pension provision, employees must answer the question “how much do I need to be saving”?
Supporting our colleagues’ financial wellbeing can be just as important as supporting their physical and mental wellbeing, supporting their retirement needs is part of this.
Auto-enrolment has led to thousands more saving towards their retirement but are people saving enough? And with more people reducing or opting out of pension savings during the cost-of-living crisis, it begs the question will the lowest paid workers be able to afford retirement?
Research by the Resolution Foundation has looked at the private pension income needed to fill the gap between the state pension and a minimum adequate standard of living. Their research found that 4 in 5 workers were not saving sufficiently to meet this level and less than 1 in 20 low paid workers is on track to meet the required income.
A new benchmark “The Living Pension” seeks to address this issue by setting cash and percentage contributions designed to make sure an employee earning the Real Living Wage can save enough to afford an acceptable standard of living in retirement.
Speak to an expert
National Housing Federation Finance Conference
We're thrilled to be leading a session at the NHF Finance conference, taking place on 15-16 March at the ACC in Liverpool, exploring how this new standard can be implemented across the housing sector and beyond.
Answering the following questions:
- How much is enough in retirement – how do we support our colleagues to set a retirement target and how may this vary across different people?
- How much needs to be saved - what savings rate is needed to meet this target? What level has the Living Pension been set at?
- How can this be implemented – why we, as employers, may want to implement the standard, how this can be done during a cost-of-living crisis and how this can be built into your wider reward strategy?
You will have the chance to hear from the Living Wage Foundation who have built on the success of the Living Wage movement, which now has over 11,000 accredited employers and has lifted the pay of nearly 400,000 workers to the real Living Wage, to hear how they have developed the standard and why it is needed.
You will also hear from Nathan Mallows of Coastline Housing. Coastline have been one of just 6 employers nationally who have been part of the Living Pension pilot and advised by Isio throughout. You will hear how they have approached the pilot and how as employer this can be implemented alongside the other needs facing the housing sector.