They say that when you are young, your heart rules your head, and when you get older, that switches around. Well, when it comes to making environmentally-savvy financial decisions – that theory appears true: millennials are more up for eco-pensions than their parents, according to research.
Savers who are under 30-years old are almost twice as likely to choose an eco-friendly option as those over 50, according to PensionBee.
Luckily for them, there are more eco-friendly pensions to choose from than ever before.
Separate research published today by Mercer, the pensions provider, has found that 17 per cent of pension funds now consider the financial risks of climate change when choosing where to invest peoples’ money – up from just 5 per cent a year ago.
Kate Brett, Principal in Mercer’s Responsible Investment Team, said: “A proactive approach to consideration of environmental issues can open up investment opportunities in the green fields of the low carbon economy, while inactivity by pension schemes brings risks from stranded assets and physical climate risks, as well as reputational risk. Given increasing regulatory involvement and public concern about climate change, it may be that in time a lack of consideration of ESG risks will be seen as a breach of fiduciary duty. We continue to work with our clients to help them integrate consideration of ESG within their decision-making processes.”
According to PensionBee’s analysis the UK’s youngest pension savers are the most socially conscious, with those under 30 almost twice as likely to choose an eco-friendly option as those over 50 (19 per cent vs. 10 per cent respectively).
In total, a fifth of British people would choose an eco-friendly pension over a standard one, the pensions platform found*.
PensionBee, which offers a pension option called the Future World Plan, run by Legal & General, examined a sample of 1,677 of its customers, looking at whether attitudes to eco-friendly pensions vary according to age and gender.
It found that men and women were equally likely to choose an eco-friendly pension (17% each).
18% of those aged 30-39 would select an environmentally friendly pension, while 15% of 40-49 year-olds would consider the environmental standards of their pension investments.
The findings strengthen the perception of an intergenerational divide in attitudes, with younger savers leading the way when it comes to eco-friendly investing.
Romi Savova, CEO of PensionBee said: “In October 2017 we launched our new Future World Plan manufactured by Legal & General. It’s specially designed to have a positive impact on the planet by focusing on companies that generate revenue through low-carbon activities, and since its launch we’ve seen an incredible uptake across the generations.
“As awareness of eco-friendly products continues to grow and savers are offered more choice, we expect an increasing number of customers to opt for a greener pension. We intend to lead the way for other pension providers, helping savers build a better future for themselves and the environment.”
Emma Douglas, Head of DC at Legal & General Investment Management added: “It is reassuring to see PensionBee’s research shining a light on current attitudes towards environmentally friendly pensions. We’ve seen a marked change in attitudes from savers who want to use their pension to help create the future they want to retire in. We have designed our Future World Fund specifically for savers who want to invest responsibly whilst at the same time protect their money from risks associated with companies who have poor ESG profiles.”
*PensionBee pays Good With Money a referral fee for any customers who sign up using the above link.