Create a better world to live and retire in

February, 2022

Pension investments to harness a more sustainable planet

How much do you think you’ll need to fund your retirement? Of course, the answer to that question will depend on what you want to do when you stop work. Worryingly, almost half of non-retirees (46%) are unable to identify how much they believe retirees receive annually from their State Pension, according to a survey[1].

Few people are aware of what their workplace pension invests in, let alone how their pension provider incorporates Environmental, Social and Governance (ESG) matters into the process.

Almost two-thirds (64%) of UK pension holders say that didn’t know their pension could be invested in ways to help fight climate change . One in six (17%) of UK pension holders currently invest their pension responsibly, but 41% say they would like their pension to be invested responsibly, new research has revealed[1].

COLLECTIVE POWER

Over three-quarters (77%) of UK adults class themselves as ‘climate conscious’. Three out of five (59%) UK adults are familiar with the term ‘responsible investment’, but only 26 per cent actually know what it means and understand its collective power to protect the planet. Men are more likely to be familiar with the term ‘responsible investment’ than women (69% vs 50%).

More than half (56%) of pension holders said they would consider investing a portion of their pension responsibly. Around a quarter (23%) were willing for at least half their pension to be invested responsibly, with one in ten (11%) wanting between 90% and 100% of their pension invested responsibly.

PROTECTING THE ENVIRONMENT

With over half (57%) of 18-24-year-olds wanting their pension investments to harness a more sustainable planet, compared to just over a quarter (29%) of 65-year-olds and over, it’s clear there is still more that can be done to build a better understanding of inter-generational financial resilience for the future.

Pension holders were also asked what criteria they would like a responsibly invested pension to consider, with climate change and protecting the environment (42%) being highly rated. Social factors such as health and safety (29%) and use of plastic (28%) followed closely behind. The research also found that more than half (53%) of pension holders do not know how their pension funds are invested.

 

Source data:
[1] Royal London commissioned survey by Opinium between 18 and 22 October 2021, with a sample of 2,000 nationally representative UK adults.

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