Ryan FowlerResearch by digital wealth manager Moneyfarm highlights stark generational differences in attitudes towards ethical investing. Among Gen Z (18–29-year-olds), 86% say they would accept lower returns or work past retirement age to avoid investing in industries they perceive as socially or environmentally harmful. This compares to 73% of Millennials (30–44-year-olds) and just one in three (34%) of the general population.
Despite these concerns, 60% of respondents overall prioritise investment returns when selecting a pension plan, compared to 28% who prioritise environmental and climate considerations. Tobacco (44%), alcohol (31%), and defence (25%) are the most avoided sectors, yet a significant 31% of Brits report having no issues investing in any industry.
Carina Chambers, technical pensions expert at Moneyfarm, explained the gap between values and action: “The research found that the likely reason for this is that the majority of people (54%) are auto-enrolled into a workplace pension, typically defaulting to a standard plan. People can change this by contacting their provider directly.”
Chambers also noted that generational differences are striking, with 90% of Gen Z ensuring their pension aligns with their values, compared to just 64% of those nearing retirement age. However, 35% of the population lack an ethical pension plan, and 33% are unsure if they have one at all.
Wider confusion over pensions remains a challenge. Over half (56%) of Brits are unaware of their pension’s potential value at retirement, and 59% do not know their plan’s risk portfolio. These issues are exacerbated by the fact that 76% find pensions confusing, with those aged 45–59 most likely to struggle.
Chambers concluded: “While contributing to a pension is vital for financial security, our research shows that investment decisions often go unexamined. Empowering people to align their pensions with their values and goals can help them make more informed financial decisions.”
