Just how ethical are tomorrow’s retirees when it comes to where their savings are invested? New research shows that age is a big factor…

The decision that savers were traditionally asked to make by advisers was their preferred balance between risk and return.  But here’s a different spin with an old coin: how much longer would you be prepared to work in order to have a clear conscience about where your savings are invested?

That’s the question posed to 2,000 people in research commissioned by wealth management firm Moneyfarm. And it looks as though younger generations are keener to prioritise ethical investment over financial returns than their older counterparts — even if it means working beyond the standard retirement age.

In fact, a whopping 86 percent of Gen A savers (18–29-year-olds) would prefer to accept lower returns on their pension savings rather than put their money into industries they consider socially or environmentally harmful.

By the time we move onto Millennials (30–44-year-olds) a smaller number (73 percent) retained the same level of commitment, and said they were willing to work longer in preference to supporting industries they are uncomfortable with.

But, once you take on board the views of older generations, just one third (34 percent) are prepared to put their money where their morals are. The research, says Moneyfarm, reflects the broader trends within society of concerns around workplace wellbeing and sustainability.

No-no… or I don’t mind?

Top of the no-no list for ethically-minded investors is tobacco, with 44 percent of respondents unwilling to have their retirement savings invested in it. That sector is followed by alcohol (31 percent), defence and ammunition (25 percent), fast fashion (22 percent) and oil and gas (21 percent).

But all that said, there remains a barrier to investors voting with their feet: while 76 percent say, yes, it matters where their pension is invested, some 42 percent admitted they have no idea which industries their savings are actually funding.

Moreover, nearly half of respondents (43 percent) were unaware that they could have a say in the funds their pension supports, while slightly over half (52 percent) confessed that they had no idea how to check whether their pension funds aligns with their values.

Carina Chambers, technical pensions expert at Moneyfarm, says that the choice of investments was mostly overlooked by employees.

“The majority of people (54 percent) are auto-enrolled into a workplace pension, which typically puts them into a standard plan,” she says. “Many don’t amend or select funds that are more personal and tailored to their values and aspirations. But people can change the fund their workplace pension is invested in by contacting the provider directly.”

Moneyfarm says that the research highlights the need for greater transparency and education around pensions – empowering workers to align their financial decisions with their long-term goals and values.

What effect would making your savings plans more ethical have on YOUR plans?

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