Socially responsible investing can boost trust in pensions

Employees who have been auto-enrolled into a workplace pension expect their money to be invested responsibly, new research shows.

Pension company NEST found that over two thirds of savers (73%) think it’s important their pension scheme considers the environment, society and corporate behaviour when investing their money. Nearly half (47%) said this mattered a lot to them, while just one in ten (12%) didn’t cite it as a key concern.

The survey was commissioned to gain an insight into the views of the new generation of savers created by the UK government’s automatic workplace pension policy.

It found that only around a quarter of workers (28%) trust pension companies, with a similar proportion (25%) saying they don’t. But hearing about how their pension is invested responsibly led to higher levels of trust, interest and confidence among savers, NEST reported.

Investing thoughtfully and responsibly could go a long way to building trust and confidence in the pensions industry, according to Diandra Soobiah, head of responsible investment at NEST.

“A potential £495bn will flow into workplace pensions over the next 12 years, making workers more powerful shareholders with a major stake in how companies and markets are run,” Soobiah pointed out. “They’re telling us they want this money invested responsibly, which could improve the environment and society they’ll live and retire in as well as their future bank balances.”

NEST’s research also found that pension saving is becoming an established part of British culture. Support for automatic enrolment has risen to a new high of 83%, and 37% now consider an employer’s pension when deciding where to work, compared with just 15% in 2014.