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Positive pensions

Saving for an income after you retire through a pension is probably the most important financial decision you can make. However, making positive choices can be very difficult.


 

Many pension funds are pretty opaque about their investments, which raises issues around exposure to controversial activities. For example, there is growing impetus from climate change campaigners for pension funds to take action to avoid the risk of ‘stranded assets’ – investments in fossil fuels which need to stay in the ground if climate change is to be avoided.

The state provides a basic pension, with the amount you receive depending on your National Insurance contributions, and retirement age depending on when you were born. Around 1 in 7 people in the UK rely solely on the state pension when they retire.

Aside from the state pension, you have three main options:

Occupational pension

This is a pension provided by your employer, who will often make contributions on your behalf, so it makes sense to stick with it. However you can also lobby your employer’s scheme to encourage them to divest from fossil fuel related activities. There are plenty of online campaigns that can help you with this:

Carbontracker and Shareaction offer lots of useful information. 

Push Your Parents is a global movement to encourage students to get their parents to lobby their pension funds.

YourEthicalMoney allows you to check the positive or ethical investment criteria of the UK’s largest occupational pension schemes.

Personal pension

These can either be a top-up to an existing occupational pension or work as a standalone scheme. There’s quite a lot of scope to choose one that fits your positive values. Ethical Consumer ranks them according to its ethical criteria while Trustnet has a useful search facility. Pension providers normally link to specific funds, so take a look at our funds section for some ideas. There are so many different permutations when it come to pensions and their providers that this is one area where it really pays to take some professional advice.

SIPPs

Self-invested personal pensions (SIPPs) allow you to invest in a wide range of assets of your own choice, including quoted stocks and shares, funds, trusts and commercial property. Investing in unlisted shares and bonds can prove more difficult, but Abundance Investment allows you to hold its peer-to-peer investments in renewable energy in a SIPP.

Auto-enrolment

This government scheme makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme. It is being phased in gradually, and if you work for a smaller company which has not yet enrolled in the scheme, you can ask them to choose an ethical option using the guides above.

Need help?

The Ethex team are here to help from 9am to 5pm

https://www.ethex.org.uk/savings--investments_16.html

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