More than half (53%) of UK savers would prefer their pension money invested in the UK, research from the Pensions and Lifetime Savings Association has revealed.
More than a third (37%) said they would prefer UK investments if they generate comparable returns and a further 16% would prioritise UK investments even if they provided lower returns.
Despite this, nearly two thirds (63%) of savers do not know whether their pensions are invested in UK businesses or infrastructure projects. In comparison, only 13% are certain that their pension includes UK investments and 24% believe it does but are unsure.
The research also highlighted a wider lack of knowledge about pension investments. A total of 74% were aware that pension schemes invest their money but only 23% of DC savers and 25% of DB savers knew where their pensions were invested. Just over a third (37%) of DC savers believe they have the skills and knowledge to choose their pension investments, while a similar number (37%) say they do not.
Climate change was also found to be a concern among many savers (70%), but only 19% of DC savers would definitely accept lower returns for greener investments. Meanwhile, half (50%) said they might consider lower returns but only if the impact was significant.
The PLSA said more must be done by pension providers and the Government to improve financial literacy, ensuring savers can make informed decisions.
Zoe Alexander, director of policy and advocacy at the Pensions and Lifetime Savings Association, said: “It’s striking that UK investments are proving to be a preference for many savers. Pension schemes are already thinking hard about how to invest more in the UK in ways that will deliver strong returns.
“The Government has a key role to play in creating the right conditions, helping to deliver the right UK growth assets for schemes to invest in, at the right price. And employers need to be encouraged to choose schemes for their employees that are delivering the best value overall, rather than just looking at the headline price, because the type of UK investments schemes are looking at can be more expensive, albeit with the potential to deliver strong returns.
Main image: patrick-robert-doyle-rMZggDARR7s-unsplash
