Most Britons don’t know whether pension is in line with their values

A survey published in Good Money Week reveals there is a significant lack of awareness over whether retirement pots are invested in line with savers’ moral values.

• 53% of people do not know whether their pension is invested in line with their values; nearly one fifth (19%) said it is not and more than a quarter (28%) said it is
• Groups most likely to be unsure about the way their pension was invested were women (66%), young people (63% of those aged under 42) and those with final salary or defined benefit pensions (56%).

As Good Money Week 2020 gets under way, a large survey has found a significant lack of awareness among pension investors of whether their retirement pot is invested in line with their values.

Findings from the Great British Retirement Survey 2020 from interactive investor, the UK’s second biggest direct to consumer investment platform, found that more than half (53%) of the more than 12,000 respondents did not know whether their pension is invested in line with their values.

Becky O’Connor, Head of Pensions and Savings, interactive investor, says: “A pension pot is the most money many of us are ever likely to have to our names, so the lack of awareness around what it’s invested in and whether these investments are in line with our moral values is quite shocking. It’s hard to imagine this level of unawareness about anything else that we commit our money to in life. 

“The survey shows that interest in ethical investing in pensions is there, particularly among women and young people. The problem is that the transparency around where workplace pension money goes from providers is generally poor. The level of information given seems to assume that people are not interested, rather than that they are.” 

Demand for ethical investing

In general, women and younger people showed the most interest in ethical investing. More than a third (36%) of our respondents said that, although they were not currently investing ethically, they would like to be able to do so. Younger people were most keen – 61% of those aged 18 to 23 and 59% of those aged 24 to 29. 

Interest gradually declined across the age groups, with those least interested appearing in the oldest cohorts – only 27% of the 72-to-77 age group and 26% of those aged over 77 said they would like to invest ethically, with 54% and 57% respectively saying they were not interested at all. 42% of women (vs 32% of men) said they would like to be able to invest ethically.

Women (66%) and young people (63% of those under 42) were among those least likely to know the way their pension is invested, as well as those with final salary/ defined benefit pension schemes (56%). 

When asked whether workplace pensions should offer ethical investments as a default option, younger people (65% of those aged 18 to 23 and 54% of those aged between 24 and 29) and women (42%) were most in favour.

This week, interactive investor unveiled its new longer list of ethical funds – the ACE40 range, giving ethical investors using the platform greater choice.

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