Nine in ten pension savers would be unhappy for their pension to be invested in companies with poor social, governance or environmental records yet the overwhelming majority do not know where their pension is invested, new research from NerdWallet has revealed.
The findings showed 85% of pension savers were unsure where their pension was invested, while 81% did not know that it is possible to invest their pension in ethical companies. A further 82% of respondents said that their pension provider has not been transparent about what they invest on their behalf. In comparison, just 11% of those surveyed have deliberately selected pension funds that are invested in industries that look after society or the environment.
In response, one in three (34%) pension savers called on pension providers to be more transparent about the companies that their funds are invested in. One third (33%) also want all pension providers to offer an ethical fund option.
NerdWallet said the research also suggested that poor knowledge about ethical pensions and a lack of transparency may be preventing more people from investing their pensions ethically with nearly a quarter (23%) of those surveyed confused about how to go about making their pension more ethical or socially responsible.
Richard Eagling, senior pensions expert at NerdWallet, said: “It is encouraging to see that so many people feel that their pension can be a force for good. While more individuals are feeling empowered by their pension and feel strongly about the impact their money can have, there is still a lag in turning these attitudes into positive action.
“Greater transparency around where pensions are invested and more guidance about how to invest ethically will be key to ensuring that more individuals are able to align their pensions with their principles, enabling them to benefit society as a whole.”
