73% of savers want their pensions invested responsibly

Written by Oliver Wade

Almost two thirds (73%) of NEST savers think it is important for pension schemes to consider the environment, society and corporate behaviour when investing their money, revealed a survey conducted by the corporation.

Of those that responded, almost 50% claimed that these factors mattered a lot to them, whereas just 12% did not cite it as a key concern. The survey found that women are more likely than man to want their pension scheme to take account of people and the planet when making investment decisions on their behalf.

The research was commissioned by NEST to allow the organisation to better understand and engage with the “new generation” of savers created by the government’s automatic enrolment policy. It found that just 28% of workers trust their pension provider, with a similar percentage (25%) claiming they do not.

However, hearing about how their pension is invested responsibly resulted in higher levels of trust, interest and confidence among savers, with approximately two thirds of NEST members wanted to hear more about this aspect of the pension.

Following the results, the firm has announced that it will continue to invest member savings, currently totalling nearly £4bn across 7 million workers, to achieve good pension outcomes by considering the wider impact of corporate behaviour on people and the planet.

For example, NEST developed a climate aware fund and has invested £624m into it since February 2017. Over the year these investments have avoided carbon emissions equivalent to taking 27,239 cars off the road each year, stopping 14,524 tonnes of waste going to landfill or powering 6,248 homes for a year.

Commenting on the findings, NEST head of responsible investment Diandra Soobiah said: “A potential £495bn will flow into workplace pensions over the next twelve years, making workers more powerful shareholders with a major stake in how companies and markets are run. They’re telling us they want this money invested responsibly, which could improve the environment and society they’ll live and retire in as well as their future bank balances.

“Hearing savers on this issue is a win-win. A more responsible approach to investing can boost long term financial returns, build a better, more sustainable future and has the added benefit of being something about pensions that might genuinely excite people.

“The green shoots of a strong pension saving culture are beginning to show in the UK, but people still mistrust the pensions industry. Investing thoughtfully and responsibly could clearly go a long way to building the trust and confidence still needed to help that culture flourish.”

Although trust in the industry is low, NEST’s research suggests pension saving is becoming an established part of British culture. Support for automatic enrolment is at an all-time-high (83 per cent) and the number of people disagreeing with the workplace pension policy has halved since 2014 from 8 to 4 per cent.

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