One in 10 Britons have chosen a sustainable pension

The research for interactive investor has revealed that Londoners are leading the way.

• Research by Opinium for interactive investor’s forthcoming Great British Retirement Survey report has revealed that 14% of Britons have made the switch to an environmentally and/or socially sustainable pension, with Londoners ahead at 27%.

Good Money Week starts today (Monday), coming at the end of a long year to date for sustainable investing. That’s because sustainably focused investments have mostly under-performed the wider funds industry amid current economic and geopolitical circumstances, and an air of scepticism regarding greenwashing and categorisation. 

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However, those prepared to wait out the storms have many reasons to remain optimistic about the long-term opportunities sustainable pension schemes present.

In honour of Good Money Week 2022, interactive investor is pre-releasing data from the forthcoming Great British Retirement Survey 2022*. The research by Opinium for ii has revealed that Londoners are leading the way when it comes to aligning their values with their pensions, ahead of other regions across the UK. Some 27% say they have chosen a pension plan that is environmentally and/or socially sustainable.

In contrast, 17% and 16% of those from the Midlands and Scotland, respectively, said that they had made the change to a sustainable pension. With 9% of respondents in the East of England saying they too had made the switch. 

Q. Have you chosen a pension plan that is environmentally and/or socially sustainable?

General population sample (see notes to editors)

The fight against the climate emergency is becoming engrained in our daily lives, from eating less meat and fighting fast fashion to switching to green energy providers. However, interactive investor’s Great British Retirement Survey has revealed that many are still in the dark about the social and environmental impact their pensions can have and how to make this switch themselves.

With over £3 trillion in pensions across the UK, they are powerful vehicles to support the transition to a greener economy. And while awareness of sustainable options is increasing throughout the financial services sector, less action is being taken to make the switch to sustainable pension schemes. With defined benefit and hybrid pensions, it may not be possible to move to a sustainable option within the scheme. Some 26% of respondents said they were unaware it could be possible to switch. 

The findings come as the government expands the Climate Change Governance and Reporting Regulations for UK pension schemes. Under this extension, occupational pension schemes are required to publish increasingly clear and transparent climate reporting in line with the 2015 Paris Agreement. Highlighting the increased necessity for employers to cater to employees demands and ensure that pension schemes are aligning with wider social and environmental values.

Becky O’Connor, Head of Pensions and Savings, interactive investor, says: “Research from the Great British Retirement Survey has revealed stark regional differences in the number of pension savers choosing sustainable pension plans. More needs to be done across the UK to increase people’s understanding of their options when it comes to where their pensions are invested. 

“Helping pension savers navigate the sector with greater confidence and encouraging active ownership is an important step in harnessing the power of pensions to make positive social and environmental impacts. Increased awareness and transparency also go a long way to eliminating greenwashing – a major concern among those looking to invest sustainably. 

“Ultimately, pension savers are vital stewards of capital, and where this money goes has a tremendous impact on the world around us with a huge potential for helping the climate.”