UK Savings Week (9-15 September 2024) is a timely reminder of the financial challenges workers face when it comes to saving. The cost-of-living crisis has made it harder than ever before to set money aside, hitting the UK’s 3.7 million low-paid workers the hardest. For those on the lowest pay, it can feel impossible to save for the future when they are struggling to meet everyday needs.
Low pension saving levels are also an issue, with four in five workers not saving enough to meet basic needs in retirement, and just one in 20 low-paid workers saving adequately, according to July 2022 research by Resolution Foundation.
Employers have an important role to play in improving their workers’ financial wellbeing. A critical first step is paying the real living wage, a rate independently calculated based solely on the cost of living. Accredited living wage employers make a commitment to pay this rate to all their directly employed and contracted staff, ensuring workers are able to afford things such as the weekly shop and household bills, as well as setting money aside for the future.
Financial security is not just about wages, it is also about hours and predictability of work. Accredited living hours employers commit to provide workers with at least four weeks notice of shifts, a contract reflecting actual hours worked and a minimum of 16 hours of guaranteed work a week for all who want it.
We also work with employers that want to ensure their workers never face pensioner poverty. The living pension accreditation offers a benchmark for employers committed to ensuring their workers can enjoy security and stability in retirement. By setting a savings target of 12% of a living wage worker’s salary, or £2,800 a year, with a minimum 7% employer contribution, businesses can help safeguard their employees’ futures.
By committing to these standards, employers can make a massive difference to their workers’ lives. We encourage more businesses to join the movement of more than 15,000 employers which have already committed to put their workers’ financial wellbeing first.
Gail Irvine is head of business development and policy at the Living Wage Foundation
