According to the results of a new poll commissioned by wealth managers, Moneyfarm, Gen Z Brits would rather work past retirement age than have a pension that funds industries that damage the environment.
In what will likely come as somewhat of a shock to many, data from a newly conducted poll reveals a whopping eighty-six per cent of Gen Z (18 – 29-year-olds) and 73 per cent of Millennials (30 – 44-year-olds) say they would rather accept lower returns on their pension savings and work past the standard retirement age to make up the shortfall than fund what they perceive to be socially or environmentally damaging industries. In contrast to these high numbers, this figure falls to one in three (34%) across the general population.
The Moneyfarm commissioned research* also revealed that the tobacco industry (44%) is top of the list of sectors that Brits do not want their pension money invested in. This was followed by alcohol (31%), defence and ammunition (25%), fast fashion (22%) and oil and gas (21%). However, one in three of those polled (31%) had no issues or worries about investing in any sector.
Overall, investment returns are more important to financially worried Brits at this time, with 60% admitting this was the priority when selecting a pension plan compared to a scheme with environmental and climate concerns in mind (28%).
With Gen Z being the most concerned about where their pension pot is being invested, 90% say they proactively ensure they are not invested in funds which do not align with their values – while those approaching retirement age are the least concerned (64%).
However, more than a third (35%) of the nation does not currently have an ethically invested pension plan, while 33% aren’t sure if they have one or not as it has never occurred to them to check—with more than half (52%) realising they wouldn’t have a clue how to find out.
Despite three-quarters (76%) claiming that it matters to them where their pension money is invested, 42% have no idea which industry sectors their hard-earned retirement savings are being allocated to the fund. Four in 10 (43%) don’t realise they have the power to select and choose.
Over half (56%) have no idea how much their pensions could be worth when they retire, and 43% admit they don’t have a clear strategy for getting the most out of their pensions.
In addition, six in ten (59%) don’t know their pension’s risk portfolio.
It’s no surprise that 76 per cent of Brits say they find pensions confusing, with those aged between 45 and 59 the most likely to be left scratching their heads.
A spokesperson from Moneyfarm commented, “The research found that the likely reason for this is that the majority of people (54%) are auto-enrolled into a workplace pension, which, by default, typically puts them into a standard plan that they don’t then go into and amend and select funds that are more personal and tailored to their values and aspirations. However, people can change the fund in which their workplace pension is invested by contacting the provider directly.
“We found that only 23 per cent of people we asked were using a pension advisor to help select a pension plan for them,” explains Carina Chambers, Technical Pensions Expert at Moneyfarm.
“Whilst contributing to a pension is a crucial step towards financial security, this research shows that the investment choices that drive the growth of those funds often go unexamined.
“We also see the generational divide in attitudes towards ethical investing is striking. While Gen Z shows a strong preference for aligning their investments with their values, even at the cost of financial returns, older generations who are that much closer to retirement tend to prioritise higher returns over ethical considerations.
“Ultimately, understanding that we have control over how our money is invested can empower people to align their pensions with their values and long-term financial goals, helping them make more informed decisions about their financial future.”
*This research of 2,000 Brits was commissioned by Moneyfarm and conducted by Perspectus Global during December 2024.
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