Nearly three-quarters (72%) of UK employees feel it is important their employer offers a responsibly invested pension, according to research by Scottish Widows.
Its Responsibly invested pensions report, which surveyed more than 6,000 employees, employers and financial advisers, also found 70% of respondents said their employers’ social responsibility credentials or benefits were important in choosing their current role.
More than three-quarters (79%) of young staff said it is important for their employer to offer a responsibly invested pension, compared to 61% of those aged over 55. Two-thirds (64%) of respondents expect their employers’ environmental and social responsibility commitments to be reflected in their pension portfolios.
Despite this, 47% did not know whether their workplace pension is actually invested responsibly and 61% of respondents did not know how to switch from their default pension to an alternative investment option that may be better suited.
Less than a quarter (23%) still have concerns about whether responsible pensions have comparable returns to traditional investing, or whether they cost more (21%). A quarter (25%) of respindents stated that they do not have enough information about responsible pensions to understand their cost and benefits.
When asked about the biggest society issues, the cost-of-living crisis topped the list for 63%, with 49% believing it to be the largest one five years from now. Diversity, equity and inclusion was also seen as a big issue among 29% of those aged 18 and 34 years, and 18% of those aged 55 and above.
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 environmental, social and governance can help build more resilient investment portfolios, but it’s also about contributing to a more sustainable future.
“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.”
