The majority of potential contributors to defined contribution (DC) pension schemes would favour social investment funds over conventional funds, a survey commissioned by the Defined Contribution Investment Forum (DCIF) has found.

The research, which surveyed 1004 potential contributors to DC pension schemes via the web, found that 77% of respondents would prefer to contribute to a social investment fund than to a conventional one.

Nearly half of respondents (44%) still preferred their chosen social investment fund even when they were told they would receive an 8% smaller pot at retirement; and over 30% still chose their social investment fund even when outcomes were much lower.

The findings, published in Identifying new ways to engage with savers in Defined Contribution Pensions, also indicated that respondents were more receptive to funds geared towards sustainability than funds supporting the local community or small businesses.

Funds supporting sustainability, for example, appealed to 43.5%; whereas funds geared towards local communities appealed to 33.3%; and those supporting local businesses appealed to only 23.3%.

Those respondents who favoured funds for local communities were more likely to be younger and female, whereas local business funds found interest from older and male audience.

DCIF and investment director at Standard Life Investments chairman Andrew Dickson said: “This research has identified an interest from large groups of future DC pension savers in what type of investments they’re making with their retirement savings, rather than just achieving investment returns derived from conventional approaches. These findings present an opportunity for the pensions industry to engage with members on the design of their DC pension investments and restore greater trust in pension savings.”

Share Story: