One in three (34%) retirees would like their provider to be more “transparent” about the companies their funds are invested in, shows a new survey of 1,612 UK adults with an occupational or private pension.
The new study on pension ethics for the independent price comparison portal NerdWallet was commissioned in the run-up to Good Money Week, which runs until October 8, and is intended to promote awareness of sustainable, responsible and ethical investments.
With £ 2.6 trillion in UK pensions held, savers have the opportunity to have a significant impact on the operations of large companies by choosing to invest only in ethical industries and companies that are socially and environmentally conscious.
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From donations to green projects to recycling, today’s savers are increasingly ethical, but few have given any thought to where their pensions go.
From fossil fuels and tobacco to exploitation and extraction, much of UK pension wealth is still invested in companies that often contradict our values.
What is the attitude towards ethical pensions?
With ethical investing at the fore, the new NerdWallet survey shows that nearly nine in ten would be dissatisfied if their job or personal pension were transferred to a company with a poor environmental (88%) or social or governance record (87%) %) would be invested. .
Around 79 percent also said they would refuse to invest their pension in a fund or company that is not ethical, even if it generates a good return. A third (33%) also want all pension providers to offer an ethical fund option.
Are people investing their pensions ethically?
Very few retirees have taken concrete steps to invest their retirement ethically. Only 11 percent deliberately chose pension funds that are invested in sectors that “do good” for society or the environment. About 85 percent did not know where their pension was being invested, and 81 percent did not know that it was even possible to use their pension to invest in ethical companies. Another 85 percent were not sure that their pension fund had assets that would not harm society.
What is preventing people from investing ethically in retirement?
The new study suggests that a lack of knowledge about ethical pensions and a lack of transparency could discourage more people from investing their work or private pensions ethically.
Around 82 percent of respondents said their pension provider was not transparent about what they were investing in on their behalf. Another 23 percent are confused about how to make their retirement more ethical or socially responsible.
Most corporate and private retirees, however, are optimistic about the performance of their pension, with 82 percent agreeing that investing ethically in their pension has the potential to influence corporate behavior.
Commenting on the results, Richard Eagling, Senior Pensions Expert at NerdWallet, said: “It is encouraging to see that so many people feel that their retirement can be a positive force.
“Although more and more people feel empowered by their retirement and greatly appreciate the impact of their money, there is still a delay in turning those attitudes into positive action.”
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He added, “More transparency about where pensions are invested and more ethical investing guidelines will be key to ensuring that more people can align their pensions with their principles so that they benefit society as a whole.”
You can read NerdWallet’s full guide to how ethical pension funds work on their website here.
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