The Living Wage Foundation has announced that the Living Pension accreditation has been extended to include defined benefit (DB) pension schemes.

Launched in March 2023, the accreditation provides an annual savings target for living wage employers who want to help their workers build a pension pot that provides enough income to achieve a basic standard of living in retirement.

The Living Pension savings target for defined contribution (DC) pensions is 12 per cent of a full-time living wage worker's salary, with a minimum employer contribution of 7 per cent.

It can also be met as an annual cash amount based on the living wage - for 2024/25, this was £2,950, with £1,720 from the employer.

Although it was initially developed for DC pensions, following a feasibility study completed by Isio last year, it has now been extended to DB pensions.

Living Wage Foundation senior project manager, Shelley Morris, commented: "We're delighted to announce that the living pension now extends to DB pensions, ensuring we can recognise and celebrate employers who provide financial security to their workers now and in retirement by offering these very valuable pensions.

"Since 2011, the living wage campaign has built a movement of over 16,000 leading employers who have chosen to do the right thing and transform millions of people's lives through decent pay.

Morris claimed that because of their commitment, nearly half a million people receive a vital cost-of-living pay rise every year, and over £3.85bn has been put back into the pockets of those who need it most.

"The living pension accreditation builds on the success of the living wage by providing an annual savings target for living wage employers to provide workers with financial security now and in the future," she added.

The Living Wage Foundation has also revealed that two employers who provide DB pensions, Rossie Young People's Trust and Hebridean Housing Partnership, are the latest to gain the Living Pension accreditation following the extension.

Rossie Young People's Trust service manager, Martin Brown, said his firm was "delighted" to be one of the first employers providing a DB scheme to obtain living pension accreditation.

"As a medium-sized charity operating our direct benefit pension scheme, we have always placed the well-being of our staff at the top of our values, reflected by being a long-established living wage employer and now a living pension employer," he continued.

"We're grateful to the Living Wage Foundation for setting these standards that all employers should be signing up to, and we are proud to be at the forefront of this initiative."

Hebridean Housing Partnership chief executive, Dena Macleod, added: "Achieving living pension accreditation is more than a badge of honour for us — it reflects our goal to be an excellent employer.

"We want to ensure our people are not only supported in their roles but also able to look to the future with confidence. We know the difference it can make in people's lives—now and in retirement."

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