Coastline Housing becomes first housing provider to sign up to Living Pension scheme
The Living Pension is a new Living Wage Foundation accreditation for employers who want to help workers boost their pension pots
Coastline Housing is the first housing provider and the 7th employer so far to sign up to the Living Wage Foundation’s new Living Pension accreditation. Coastline Housing is an independent Cornish charitable housing association owning and managing 5,000 homes.
The Living Pension is a voluntary savings target for employers who want to help workers, especially those on low pay, build up a pension pot that will provide enough income to meet basic everyday needs in retirement. It launched in March 2023.
The Living Pension savings target is 12% of a full time Living Wage worker’s salary, of which the employer pays in at least 7%. This builds on auto-enrolment, where the employer is only required to contribute 3%. The Living Pension savings target can also be implemented as a cash amount of £2,550 a year. The employer contributes at least £1,488 to this cash amount.
Coastline is the first employer to use the cash target to ensure all workers are meeting the Living Pension savings standard within their pension and benefits offering, regardless of their earnings. This has resulted in 76 (21%) of its 366 workers seeing an increase in their annual contribution. The Association is also going further by paying the minimum employer contribution of £1488 per year, even where workers aren’t paying contributions themselves. As a result, 50 workers who were previously opted out are now getting pension contributions to help them achieve security and stability in retirement.
Nathan Mallows, Coastline Director of Finance, People and Change, said:
"We are very excited to be able to include this offer within our total benefits package. As a responsible employer, we understand that even though we aim to support colleagues with our pension scheme, there can be obstacles to putting aside money every month. Signing-up to the Living Pension accreditation allows us to transform provision for retirement to secure a much-improved future standard of living for our employees."
Katherine Chapman, Director of the Living Wage Foundation, said:
“We are delighted that Coastline has signed up as one of the first Living Pension employers, providing stability and security for their workers now and in the future. Over the last ten years the Living Wage campaign has grown in strength and numbers. Now paid by over 12,500 employers, it delivers essential pay rises to 430,000 workers every year. The Living Pension builds on this by encouraging employers to do more to help their workers build a pension pot that meets basic everyday needs in retirement.”
Katy Taylor, Director at Isio who has worked with Coastline on the trial, added:
“It’s been an honour to work with Coastline and help the organisation achieve its ambition of providing an acceptable retirement income. Employers are increasingly becoming aware of their responsibility to support the financial wellbeing of their employees, not only with a living wage, but by providing an inclusive and fair reward package which is effective at every stage of their career. We hope Coastline’s successful implementation encourages others to review their approach and help reduce the number of workers who may be forced into poverty when they retire.”
About the Living Wage Foundation and the Living Pension
The Living Wage Foundation is at the heart of the independent movement of businesses, organisations and people who believe workers should be paid a real Living Wage that meets basic everyday needs, and those needs don’t end with retirement. Previous research completed by Resolution Foundation found that 4 in 5 workers saving into defined contribution schemes (16 million workers) were not saving at levels likely to meet living costs in retirement. Only 1 in 20 low-paid workers are saving enough. We therefore developed the Living Pension as a voluntary accreditation for Living Wage Employers to help workers build up a pension pot that meets living costs in retirement.
The Living Pension launched in March 2023. There are 7 accredited Living Pension Employers: Aviva, Phoenix Group, Wealthify, Herbert Smith Freehills, Good Things Foundation, Citizens UK and Coastline Housing.
The Living Pension is funded by abrdn Financial Fairness Trust.
What about the Government’s auto enrolment pension?
All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’. Employers must automatically enrol employees into a pension scheme and make contributions to their pension if they are classed as a ‘worker’; they are aged 22 to state pension age; they earn at least £10,000 per year and they ordinarily work in the UK. There are some exclusions as outlined in Government guidance.
In most automatic enrolment schemes, contributions are based on ‘Qualifying Earnings’, which is total earnings between £6,240 and £50,270 a year before tax. Employers are required to pay 3% of Qualifying Earnings and Employees are required to pay 5% (which includes 1% tax relief). Employees can choose to opt out of automatic enrolment but if they meet the thresholds outlined above, they must be re-enrolled again at least every three years.
Under automatic enrolment, a Living Wage employee working 37.5 hours per week would have £1201 going into their pension each year (with £450 coming from the employer), where as the Living Pension would be £2,550 (with £1,488 coming from the employer).
About Isio
Isio is a leading independent UK provider of actuarial & consulting, pensions administration, investment advisory, employee reward & benefits and wealth advisory services. With a national team of 800 people across nine regional hubs, Isio is committed to promoting financial wellbeing for all and works with companies, trustees and individuals to help them make informed decisions to protect their financial future.
Isio was launched in March 2020 when it acquired the pensions advisory practice of KPMG LLP with backing from Exponent Private Equity LLP. In January 2022, Isio acquired Premier Pensions Management Ltd enhancing and extending its service offering to new and existing clients. On 10 January 2023 Isio announced that it has signed an agreement to acquire Deloitte Total Rewards & Benefits Ltd, the UK pensions advisory business of Deloitte LLP, subject to FCA regulatory approval.