Forty four per cent of UK pension holders would switch to a green pension if given the choice
UK savers want their money to do good in the world as research from Make My Money Matter reveals that 44 per cent of pension holders would switch to a green pension if offered one by their provider – equating to almost 18 million savers across the country.
The survey, conducted by YouGov and commissioned by Make My Money Matter, confirms that savers want their investments to build a healthier planet for our retirement, as well over half (61 per cent) of pension holders want their pension to play an active role in fighting climate change.
Savers appear to be kept in the dark around where their pensions are actually invested as 80 per cent have never considered whether their monthly contributions could be accelerating global warming. In fact, almost two-thirds (63 per cent) of savers admit to having no idea where their pension is currently invested.
Younger generations are the least in-the-know about where their money is going despite being the most concerned about climate change. Three quarters (74 per cent) of those aged 18-24 do not know where their monthly pension contributions are invested and more than one-third (37 per cent) are unaware that their pension counts as an investment at all.
Poor transparency from employers and pension providers appears to be driving scepticism and pessimism among scheme members. Almost half (47 per cent) of savers do not think that their employer adequately communicates where their scheme is invested and a further 43 per cent feel that their provider does not offer enough information about their pension.
This lack of clarity leads pension holders to assume the worst as only 12 per cent of pension holders envision that their pension is currently having a positive impact on people and the planet. The majority do not know (60 per cent) or do not believe (17 per cent) that their contributions are invested in line with their values – potentially undoing much of their good work to become more sustainable in their day-to-day lives.
Pension holders are unhappy that their pensions may currently be funding oil and gas giants, weapons manufacturers or companies with links to deforestation, despite many schemes remaining in these stocks. As a result, many savers are prepared to take action. Over half (55 per cent) of pension holders say they would switch provider if they uncovered that their pension was invested in deforestation or labour rights violations and just under half would do the same if their money was found to be funding fossil fuels (41 per cent) or the production of weapons (49 per cent).
Savers clearly want to see their money invested in a way that helps to build a better world and tap into the hidden superpower that is their pension. Over half (53 per cent) of those surveyed consider it important that their pension does good for both people and the planet, while younger generations – 65 per cent of those aged 18-24 – are the most likely to switch to a green pension should their provider offer them one.
Richard Curtis, Co-Founder of Make My Money Matter, says: “This research absolutely confirms what our campaign and many others have been saying - that UK savers want their money invested in ways which help tackle the climate crisis. But are held back by a lack of information, poor communication and limited choice.
"As people across the UK increasingly engage with all the things we can do fight climate change – from the food we eat to the clothes we wear and how we travel – 80 per cent of us never think about how our money could actually be contributing to the climate crisis. Having a sustainable pension can make our money matter and be one of the most powerful tools we have to change the world. We must urgently change this and unlock the hidden superpower hiding within our pensions.
"To do this, we’re calling for all pension providers to commit to Net Zero targets by COP26, ensuring that the UK becomes a true global leader in green pensions. We know that continued investments in unsustainable businesses are bad for the planet and go against the wishes of the majority of UK savers. They are also increasingly bad for returns and sustainable pensions are now delivering excellent returns.
“Now is the moment for the pensions industry to respond, and make sure that the GBP3 trillion invested in our pensions actually helps to build a world we want to retire in."