If you thought that investing in a retirement fund was the only planning for retirement you ever needed to do, you wouldn’t be the only one. For a long time, employees across the UK have believed that personal pension planning is as simple as just ensuring you have one, but did you know your pension could be investing in industries you wouldn’t support otherwise?
It may surprise you to find that of the trillions of dollars in UK pensions, plenty of that is being used to fund huge fossil fuel companies. Your hard-earned money could even be going towards industries like gambling, tobacco and even weapons and arms manufacturing. Of all the people across the UK who regularly invest in their pension, only 22% know where their money is being invested.
If you’re pension planning in the UK and want to ensure your money isn’t supporting causes you’d otherwise avoid, you may want to consider switching to an ethical pension. Otherwise known as ESG pensions (Environment, Social, Governance), the funds are invested in companies and groups who want to make a difference in the world. If your retirement planning entails leaving what you’ve built to the people you love, you may also be concerned with the planet we leave for future generations to inherit. Money will support them through almost anything, but systemic changes will take a little more effort from everyone. Investing in a sustainable pension is about more than just supporting good causes; it’s about ensuring a bright future and setting solid foundations upon which our descendants can build.
When you do your personal pension planning, you’ll want to conduct some serious research first. Find out what companies and industries some pension providers are likely to invest in, find out where you don’t want your money to go and what your ideal ethical pension investment would look like.
Want to make a change while also planning for retirement? We work with several fantastic investment partners who specialise in sustainable and ethical investment management, which we recommend you consider for your pension.
Pacific Asset Management
Pacific Asset Management (PAM) offer a range of multi-asset sustainable portfolios and an Article 8 global equity Longevity & Social Change fund. Within their multi-asset strategies, sustainability is the primary driver of returns, employing globally recognised frameworks and in-house sustainability & ESG tools to assess the sustainability credentials of the underlying investments. Whilst the Pacific Longevity & Social Change Fund focuses on secular multi-year Longevity & Social Change themes with the S in ‘ESG’ at its core. As an Article 8 fund, the portfolio team are committed to promoting ESG characteristics. PAM is proud to be a signatory to the United Nations Principles for Responsible Investment (UN PRI).
LGT offers a range of risk-rated and bespoke sustainable investment strategies. Introduced in 2009, the LGT Sustainability Rating for equities, bonds, funds, and ETFs is an in-house rating tool that awards individual investments one star (poor) to five stars (excellent) for their sustainability quality based on the ESG score achieved. This gives clients access to easy-to-understand information about the sustainability quality of their investments and enables them to make their investments more sustainable.
Brooks Macdonald offers two responsible investment strategies: Advance and Avoid. Both offer an actively managed, multi-asset investment solution that benefits from our investment expertise and oversight. Advance invests in businesses that seek solutions to sustainability issues or that have strong corporate policies and outputs relating to environmental, social, and governance (ESG) criteria. Avoid prevents exposure to companies involved in the production of armaments, tobacco, alcohol, pornography, and gambling.
If you’re employed, then your pension schemes were likely decided for you. You can contact the pension companies to enquire about their specific ESG pension options, if they have any! Or, as an independent financial advisory, we have choice of the whole pension and investment market and have researched the companies leading from the front in the ESG space.
If you would like to understand better the current state of your pension and how you can start investing in the things that matter most to you, get in touch with one of our UK-based pension planning experts. We’d be delighted to consult on the best retirement strategy for you.
If you’d like to discuss your specific needs and ambitions and find the right advice for you, complete the contact us form and we’ll be in touch shortly.