A NEW pensions standard aimed at helping workers to save for retirement has been launched by the Living Wage Foundation.

The living pension is a voluntary savings target for employers who want to support workers in building up a pension to help meet basic everyday needs in retirement.

The savings target, which particularly aims to help lower earners, is 12 per cent of a worker’s salary, of which the employer pays in at least 7 per cent.

Under current automatic enrolment rules, a minimum of 8 per cent of eligible earnings must be paid into a workplace pension, with the employer paying in at least 3 per cent and employees’ contributions and tax relief also making up the pot.

A survey of more than 3,000 working-age adults who have recently been saving into a pension found that more than half (56 per cent) feel they will never be able to retire.

And 8 per cent plan to cut their contributions in the months ahead, as everyday living costs bite, according to the poll by research group Savanta.

The Living Wage Foundation is already known for its campaigning around the real living wage, which is voluntarily paid by thousands of businesses. 

The foundation said the living pension builds on this work, by helping to provide stability and security for workers in retirement.

Katherine Chapman, director of the Living Wage Foundation, said: “Low pension saving levels are a longstanding 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.”