A third of pension savers would divest to support the living wage

A third (33 per cent) of pension savers would prefer to completely divest from companies that fail to pay their employees a living wage, according to PensionBee.

Research conducted by the provider in March 2021 revealed that 83 per cent of savers expected the companies in their pension to pay all of their workers enough to meet everyday needs.

Just 16 per cent of respondents were happy to invest their money in companies failing to pay the living wage as long as they were making money, stating that the problem should be a concern for the government rather than investors.

When asked about what problems should be prioritised when voting, respondents said the most important thing was a company’s poor treatment of its workforce, followed by tax avoidance and poor climate risk management.

PensionBee added that just 43 companies of the companies listed on the FTSE 100 pay the living wage to all of their staff, including those employed through contractors on their UK sites.

The living wage is currently £9.50 an hour across the UK and £10.85 in London.

PensionBee chief engagement officer, Clare Reilly, commented: “These survey results demonstrate that the imperative for a living wage is increasing. Paying employees enough to meet their everyday needs should not be optional for any company in the UK, particularly those that are listed on the London Stock Exchange.

“Pension savers recognise both the huge negative impact to society that poverty pay brings and also the risk to the long-term sustainability and profitability of these companies. These survey results should be a wakeup call for companies that refuse to pay wages that reflect real living costs.”

ShareAction head of Good Work, Martin Buttle, commented: "This is important and informative research which shows that savers expect pension funds and their asset managers to set high stewardship standards on good work/quality of work.

“Paying a living wage is a clear indicator of a company’s approach and intentions in this regard. This research shows that savers clearly recognise this as a baseline requirement.”

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