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'Green’ pensions chosen by a fifth of savers

'Green’ pensions chosen by a fifth of savers

Almost a fifth of UK savers are choosing an environmentally friendly pension product, according to data from online reconsolidator PensionBee.

The fintech company has seen 17 per cent of its new clients – from a total of 1,677 new savers – choosing its Future World Plan between October 2017 and March 2018, which is managed by Legal and General Investment Management (LGIM).

The fund - Future World Fund – invests in a globally diversified portfolio of shares, giving preference to companies which are less carbon intensive or earn green revenues.

LGIM announced this week (11 June) that it will take action against companies that are not addressing the risks of climate change, including removing them altogether from its main investment index. 

According to the online pension manager’s analysis of these clients, the youngest savers are the most socially conscious.

Those under 30 are almost twice as likely to choose an eco-friendly option as those over 50 - at 19 per cent and 10 per cent, respectively.

Around 18 per cent of those aged 30-39 would select an environmentally friendly pension, while 15 per cent of 40-49 year-olds would consider the environmental standards of their pension investments, the research found.

Age group

Proportion of individuals in eco-friendly option (%)

Sample

Under 30

19

371

30 – 39

18

839

40 – 49

15

361

Over 50

10

106

Total

17

1,677

Despite this intergenerational divide in attitudes, there’s no difference between genders.

The research showed that 17 per cent of women and an equal percentage of men favour the Future World Plan. 

Gender

Proportion of individuals in eco-friendly option (%)

Sample

Female

17

481

Male

17

1,196

Total

17

1,677

According to Romi Savova, chief executive of PensionBee, the Future World Plan was “specially designed to have a positive impact on the planet by focusing on companies that generate revenue through low-carbon activities”, and since its launch the company has “seen an incredible uptake across the generations”.

She said: “As awareness of eco-friendly products continues to grow and savers are offered more choice, we expect an increasing number of customers to opt for a greener pension.

“We intend to lead the way for other pension providers, helping savers build a better future for themselves and the environment.”

 

Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, said that climate risk and green investments aren't one of the most important questions for the majority of his clients, as they are older and approaching retirement.

He said: "If we look at the past performance of these funds, they are doing better than others. It isn't a topic on the top of the agenda right now, but I see it growing in the future." 

Research published yesterday by the responsible investment charity ShareAction showed that climate-related financial risks are not addressed sufficiently by auto-enrolment default funds.

FTAdviser reported today (12 June) that the Financial Conduct Authority (FCA) and the Financial Ombudsman Service (Fos) are to clarify how compensation claims regarding social impact elements of investments will be treated.

A government taskforce stated that the FCA and ombudsman "should ensure a joined-up approach is communicated to the adviser community," as these professionals are still unclear about how to talk to their clients about responsible investments.

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