Almost three quarters (72%) of UK employees believe it is important that their employer offers a responsibly invested pension, new research from Scottish Widows has revealed.
Despite this, almost half (47%) do not know whether their workplace pension is invested responsibly.
The findings, part of Scottish Widows’ Responsibly Invested Pensions Report, showed pension savers are concerned about the issues impacting the world into which they will retire, influencing how they expect pensions to be invested and their employers’ role in this.
When asked about the biggest issues facing society, nearly two thirds (63%) of employees cited the cost-of-living crisis, with 49% believing this will continue to be the biggest issue society faces in five years’ time. More than four in 10 (44%) cited climate change, while 37% said plastic waste and 33% listed water pollution.
As a result, 72% believe it is important that their current employer offers a responsibly invested pension and 70% said their employer’s social responsibility credentials or benefits were important in choosing their current role.
Younger employees place an even greater emphasis on responsibly invested pensions. Over three-quarters (79%) said it is important for their employer to offer a responsibly invested pension, compared to 61% of those aged over 55.
However, a lack of awareness and education remain key barriers. Nearly two-thirds (61%) don’t know how to switch from their default pension to an alternative investment option that may be better suited to meet their objectives.
Just over a fifth (23%) still have concerns about whether responsible pensions have comparable returns to traditional investing or whether they cost more (21%). One in four (25%) have also stated that they do not have enough information about responsible pensions to understand their cost and benefits.
Eva Cairns, head of responsible investment at Scottish Widows, said: “Employees are increasingly seeking to make sure their investments, including pensions, deliver financial return while considering the impact on people and planet, and there is clear demand for more responsibly invested options.
“We know pension savers are concerned about financial security and believe that considering risks and opportunities related to ESG can help build more resilient investment portfolios, but it’s also about contributing to a more sustainable future, tackling some of the societal issues people care about.”
Cairns added: “There’s still a big knowledge gap to tackle, and employers should not only offer responsible pensions, but also do more to empower employees with the information they need to make more informed decisions.”
Main image: artur-luczka-loAfOVk1eNc-unsplash
