The vast majority of Gen Z (86%) and Millennials (73%) said they would rather accept lower returns on their pension savings and work past the standard retirement age than fund what they perceive to be socially or environmentally damaging industries.
This is according to research from digital wealth manager Moneyfarm, which found that only 34% of the general population feel the same way.
The tobacco industry came top (44%) as the one people in the UK do not want their pension to be invested in.
This was followed by alcohol (31%), defence and ammunition (25%), fast fashion (22%) and oil and gas (21%).
However, just under a third (31%) of the nation said they have no issues or worries investing in any sector.
Out of those who are more financially worried, 60% said the priority is investment returns when selecting a pension plan.
Still, over half (52%) of people said they would not have a clue how to find out if their pension was ethically invested or not.
Additionally, 43% do not actually realise they have the power to select and choose where their pension invests.
To add to the issue, 56% have no idea how much their pensions could be worth when they retire and 43% admit they do not have a clear strategy on how they can get the most out of their pensions for retirement.
This has left 76% describing pensions as “too confusing”.
Moneyfarm technical pensions expert Carina Chambers said: “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.
“But people can change the fund their workplace pension is invested in by contacting the provider directly.
“We found that only 23% of people we asked were using a pension adviser to help select a pension plan for them.
“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.”
In order to obtain these results, Moneyfarm commissioned Perspectus Global to ask 2,000 UK citizens during December 2024.
Let’s see how they feel at 55!
Steve D – Indeed. It’s just talk from Gen Z and Millenials. Their investmens – such as they are – are pretty insignificant. As in so many things it would seem that the USA is leading the way. Try mentioning ESG there an d you’ll get short shrift.