09 November 2021

Millions unaware of the power of their pension

5 min read

  • Over three quarters (77%) of UK adults class themselves as ‘climate conscious’;
  • However, nearly two thirds (64%) of pension holders are unaware their pension could help fight climate change including over half of men (58%) and almost three quarters (71%) of women; and
  • Almost one in four (23%) of pension holders want at least half of their pension invested responsibly.

New research from the UK’s largest mutual pension and investment company, Royal London, reveals that almost two thirds (64%) of UK pension holders are unaware that their pension could be invested in ways to help fight climate change. One in six (17%) of UK pension holders currently invest their pension responsibly, but 41% say they would like their pension to be invested responsibly.

What does investing responsibly mean?

Terminology can be confusing. Three out of five (59%) UK adults are familiar with the term ‘responsible investment,’ but only 26 per cent actually know what it means and understand its collective power to protect the planet. Men are more likely to be familiar with the term responsible investment than women (69% vs 50%).

The power of pensions

More than half (56%) of pension holders said they would consider investing a portion of their pension responsibly. Around a quarter (23%) were willing for at least half their pension to be invested responsibly. With one in ten (11%) wanting between 90% and 100% of their pension invested responsibly.

With over half (57%) of 18-24-year-olds wanting their pension investments to harness a more sustainable planet, compared to just over a quarter (29%) of 65-year-olds and over, it’s clear there is still more that can be done to build a better understanding of inter-generational financial resilience for the future.

Pension holders were also asked what criteria they would like a responsibly invested pension to consider, with climate change and protecting the environment (42%) being highly rated. Social factors such as health and safety (29%) and use of plastic (28%) followed closely behind.

Sarah Pennells, Consumer Finance Specialist at Royal London, said: “It’s encouraging to see that so many people consider themselves to be climate conscious and our research shows that the nation is taking steps forward to improve the health of the planet. But we all need to look at our finances and their collective power to do well and do good. From helping reduce emissions to promoting diversity, pensions can be invested to support individuals in retirement whilst helping us all move towards a more sustainable world.”  

Finding out how to invest more responsibly

The research also found:

  • More than half (53%) of pension holders do not know how their pension funds are invested.
  • Those who want to find out more about responsible investment would mostly value the advice of financial advisers (19%), free guidance services, such as MoneyHelper (14%) or their family and friends (10%).
  • Nearly a quarter (23%) would carry out their own research to find out about responsible investment.

Royal London’s Invested Generation campaign recently launched a Facebook community which provides a range of support and resources for UK pension holders as to how they can best invest responsibly. In addition, more information is also available on the Royal London website.

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For further information please contact:

Ellie Wallis

Notes to Editors

  1. Royal London commissioned a survey by Opinium between 18-22 October 2021 with a sample of 2,000 nationally representative UK adults.
  2. The explanation of responsible investing given to those taking part in the survey was: There are trillions of pounds invested in UK pensions and this money is invested in a range of companies that are shaping the world’s future. These could include high street retailers, airlines, banks and energy providers. By choosing to invest your pension responsibly, you’re taking into account the impact that companies you invest in have on the environment, society, and how well the company is run. You can find out how your pension is invested by talking to your pension provider. Does this information change how likely you would be invest your pension responsibly?
  3. According to the ONS Pension wealth in Great Britain - Office for National Statistics (ons.gov.uk) latest report, in 2018, 53% of adults aged between 16 and 64 are active members of a pension.
  4. More information on the Royal London Sustainable Leaders fund and its carbon footprint can be found here tcfd-report-2020.pdf (rlam.co.uk)

About Royal London

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £153 billion, 8.8 million policies in force and 4,075 employees. Figures quoted are as at 30 June 2021.