Nearly three-quarters, 72 per cent, of pension savers have said that is it important for them to know where their pension pots are invested, Big Society Capital has found.
According to a new report Pensions With Purpose, commissioned by Big Society Capital, three quarters of savers want to know where their pension is invested, while two in five defined contribution members admit that they know little or nothing about it.
The research by ComRes, surveyed over 1,500 UK employees with DC pensions and found that when it comes to pension investments, almost half, 46 per cent felt it is important that their savings are invested in organisations that reflect their social and environmental views. This rose to 55 per cent of millennials.
Preferred areas of investment included health and social care, environmental projects and housing.
While showing an interest in this area, less than three in ten pension savers stated that they had been consulted by their employer as to where their fund is invested. Once this information is shared, almost 40 per cent of employees said they would want their pension invested in something else if the investments didn’t align with their values and 35 per cent said they would want their employer to switch provider.
One in eight employees said that if their pension was invested in businesses that contradicted their values, they would stop saving into their pensions.
As a result, three in five noted that providers should be responsible for giving information on pension investments.
Furthermore, two in five employees surveyed said that they would be more likely to take up a pension if their employer offered social pension funds, and almost a third, 31 per cent, said they would save more if this type of fund was offered to them.
Big Society Capital senior director Simon Rowell, said: “Clearly people care about where their pensions are invested, but the current system is not working for many who are not engaging and not saving enough for their retirement. A new generation of social pension funds could help people redirect their pensions to causes and companies they believe in. This could not only increase saving and engagement between employees, employers and pension providers but help build a stronger society as well.”
NEST director of investment development and delivery Paul Todd, added: “This research adds to the growing body of evidence showing that far from being uninterested, most people care how their pensions are invested. It also highlights an interesting generational split. Millennials in particular expect their savings to be invested in ways that both generate sustainable returns and reflect their values.”