Your workplace pension could become one of your biggest investments. But most of us know far less about where that money goes than we do about our bank account, mortgage or energy supplier.
Pension funds can invest in companies linked to fossil fuels, weapons and deforestation. They can also support renewable energy, cleaner transport, social housing and businesses tackling environmental and social problems.
You usually can’t choose the pension provider selected by your employer. You may, however, be able to switch funds within the scheme. This makes the default particularly important, as most employees simply stay in it.
We assessed the leading UK workplace pensions on their default funds, ethical exclusions, climate plans, positive investment, charges and transparency. These are the six that performed best overall.
How we use the Good Money Test
We put each provider through the Good Money Test, Good With Money’s framework for checking whether financial firms live up to their ethical and sustainability claims.
We look at:
- where members’ money goes, particularly in the default fund
- whether exclusions, charges and climate targets are clearly explained
- whether the provider invests in environmental or social solutions
- how it uses its influence through voting and engagement
- whether its actions back up its marketing
A fund labelled as ethical or sustainable doesn’t get an automatic pass. We’ve also considered costs, gaps in disclosure and whether members receive the strongest ethical approach automatically or must actively choose it.
Ethical workplace pensions at a glance
| Provider | Best for | Good Money Test |
| Nest | A strong all-round combination of access, cost and ethical detail | Strong pass |
| Smart Pension | Sustainability built into the default | Strong pass |
| Pangea Impact Investments | Positive impact at the heart of the default | Pass |
| Aviva | A wide range of ethical and sustainable funds | Pass |
| Cushon | Digital engagement and investment in environmental and social projects | Pass, with reservations |
| The People’s Pension | A no-shareholder structure and tightly screened Ethical Fund | Pass, with reservations |
Nest
Good Money Test verdict: Strong pass
Nest is our top all-round choice. It’s widely available, relatively affordable and unusually open about how it invests members’ money.
Set up by the government to support auto-enrolment, Nest must accept any UK employer that wants to use it. It has no shareholders and currently looks after pensions for around 14 million people.
Most members are invested in its Retirement Date Funds. These adjust the investment mix as members move closer to retirement and hold assets including shares, bonds, property, and renewable energy infrastructure.
The default isn’t fossil-fuel-free, but it excludes tobacco and controversial weapons. Nest has also been selling holdings in fossil-fuel companies that it believes aren’t making credible progress towards net zero.
Members wanting stricter screening can choose the Nest Ethical Fund. It avoids areas including tobacco, alcohol, gambling, weapons, private prisons, pornography, animal fur, cosmetics tested on animals and unsustainable palm oil.
Nest aims to halve portfolio emissions by 2030 compared with 2019 and reach net zero by 2050. It also publishes information showing how its investment managers vote at company meetings. Nest ranked first in Make My Money Matter’s 2025 Climate Action Report.
Employers don’t pay to use Nest. Members pay 1.8 per cent on new contributions and an annual charge of 0.3 per cent on their pension pot.
Why it makes the list: Nest combines competitive charges, clear ethical policies and strong public reporting. Its main limitation is that members must switch funds to receive its strictest ethical exclusions.
Good for: Employers of almost any size looking for a practical scheme with a credible ethical option.
Smart Pension
Good Money Test verdict: Strong pass
Smart Pension stands out because sustainability is built into its main default fund. This gives it a real advantage when most employees are unlikely to choose a fund themselves.
Its default is the Smart Sustainable Growth Fund, which invests across several types of asset and aims to favour companies and projects addressing environmental and social challenges.
Members who want tougher screening can choose the Ethical and Climate Fund. Smart says its wider range also includes a fossil-fuel-free option, impact equity and bond funds, ESG index funds and Sharia choices.
Smart aims to make listed assets in its default growth fund net zero by 2040. It also publishes climate, voting and stewardship reports and placed fourth in Make My Money Matter’s 2025 climate ranking.
Pricing is less clear than we’d like. Employer charges vary, while members may pay both a fund charge and a monthly fee. Employers will need a tailored quote to compare it properly with other providers.
Why it makes the list: Smart offers one of the clearest sustainability-led defaults in the market, backed by specialist ethical funds and defined climate targets.
Good for: Employers who want sustainability to reach the whole workforce without relying on staff to switch funds.
Pangea Impact Investments
Good Money Test verdict: Pass
Pangea is slightly different from the other names on our list. It’s created a positive-impact default investment solution for workplace pensions designed to meet UK auto-enrolment rules.
This means employees can be placed into a sustainable strategy automatically, rather than having to find and select a separate ethical fund.
Pangea focuses on funds seeking solutions to climate change and social inequality. It says investment managers are assessed on their commitment to impact, track record and whether their investments continue to match their stated purpose.
Its portfolios use equity and bond funds from specialist impact managers. Pangea has previously named the Triodos Pioneer Impact Fund as one example, although we couldn’t find a current public list of the funds or holdings in its workplace default.
The pension is delivered through specialist partners covering regulation, administration, custody, technology and investment management. Pangea worked with asset manager Amundi to create a default designed to operate within the 0.75 per cent charge cap applying to auto-enrolment pensions.
It’s also a certified B Corp, supporting its wider environmental and social purpose.
The workplace proposition is new, so it doesn’t have the long track record or depth of public reporting available from larger schemes. We couldn’t find a simple public figure showing the total charge paid by members and would welcome clearer information on holdings, voting and stewardship as it grows.
Why it makes the list: Pangea was created to change the workplace pension default, rather than adding an ethical fund to a largely conventional range. Its positive-impact focus gives values-led employers a distinctive alternative.
Good for: B Corps, charities and organisations that want their workplace pension to reflect their environmental and social commitments.
Aviva
Good Money Test verdict: Pass
Pangea is the specialist newcomer on our list. It was created to put positive impact at the heart of workplace pensions, rather than asking employees to hunt for a separate ethical fund.
Its default strategy is designed for UK auto-enrolment and focuses on funds seeking solutions to climate change and social inequality. Pangea says it chooses investment managers based on their impact credentials, track record and whether they continue to invest in line with what they promise.
Its portfolios use equity and bond funds from dedicated impact specialists. Pangea has previously named the Triodos Pioneer Impact Fund as one example, although we couldn’t find a current public list of the funds or holdings in its workplace default.
Pangea works with specialist partners to provide the pension, technology, custody and investment management. It also worked with asset manager Amundi on a default designed to fit within the 0.75 per cent charge cap for auto-enrolment pensions. The company is a certified B Corp.
Because the workplace offer is new, it doesn’t have the long track record or detailed public reporting of the larger schemes. We also couldn’t find one clear figure showing the total cost to members, and we’d like easier access to information on holdings, voting and stewardship.
Why it makes the list: Pangea puts sustainability into the default, so staff don’t have to understand fund lists or make an active switch before their pension follows a positive-impact approach.
Good for: B Corps, charities and other values-led organisations that want their workplace pension to reflect their environmental and social commitments.
Cushon
Good Money Test verdict: Pass, with reservations
Cushon has built sustainability into its workplace pension and makes a real effort to help members understand where their money is invested.
It became part of professional services group WTW in May 2026, although the Cushon Master Trust continues as a distinct workplace pension proposition.
Its main default is the Cushon Sustainable Investment Strategy. Alongside shares and bonds, it invests in areas including renewable energy, forestry, social housing and clean technology.
Cushon aims to lower carbon emissions, increase exposure to green business revenues and invest more in companies supporting the UN Sustainable Development Goals.
It excludes controversial weapons and companies linked to serious breaches of international standards. Some underlying funds also restrict tobacco, thermal coal, oil sands and nuclear weapons.
The app is a strength. Members can see their pension, fund choices and charges in one place, helping to make a long-term investment feel more relevant.
Cost is our main reservation. Cushon says its annual management charge starts at 0.69 per cent, depending on the employer and investments. It also ranked eighth in Make My Money Matter’s 2025 climate comparison.
Why it makes the list: Cushon offers a sustainability-led default, investment in real-world environmental and social projects, and an engaging digital experience.
Good for: Employers who want staff to engage more closely with their pension and understand what their money is helping to fund.
The People’s Pension
Good Money Test verdict: Pass, with reservations
The People’s Pension serves more than seven million members and over 100,000 employers.
It has no external shareholders and is overseen by an independent trustee. This doesn’t automatically make every investment ethical, but it means the scheme is run for members rather than to pay dividends to investors.
Most members remain in its Balanced lifestyle profile. This spreads money across different investments and gradually reduces risk as retirement approaches. The provider says around 80 per cent of members’ money is now held in climate-aware investments.
Members can choose the more tightly screened Ethical Fund. This avoids fossil fuel producers, tobacco, alcohol, gambling, pornography, weapons, recreational cannabis, for-profit prisons and unsustainable palm oil.
Members pay an annual charge of 0.5 per cent plus £6.50 a year, with the percentage charge falling as their pot grows. Employers registering directly usually pay a one-off fee of £500 plus VAT, although this may be waived through some advisers and payroll providers.
Its default has become more climate-aware, but members must actively select the Ethical Fund to receive the strongest exclusions. It placed ninth in Make My Money Matter’s 2025 assessment.
Why it makes the list: The People’s Pension combines a member-focused ownership model with a strongly screened Ethical Fund and improving climate and stewardship policies.
Good for: Employers attracted by its no-shareholder structure, particularly where staff receive clear help to choose an ethical fund.
How should an employer choose a workplace pension?
Ethics should sit alongside charges, payroll compatibility, employee support and investment performance.
Ask each provider for its latest default fund factsheet, full fee schedule, exclusions, climate targets and voting reports. Check whether its responsible investment policies apply to the default or only to an optional fund.
A strong ethical fund will have limited impact if hardly anyone chooses it. A fund described as sustainable may also hold oil and gas companies because its manager prefers to push for change through voting and engagement.
Employers should decide what’s most important to their workforce. This could include avoiding harmful sectors, cutting carbon emissions, investing in solutions or challenging companies through shareholder votes.
Frequently asked questions
What is an ethical workplace pension?
An ethical workplace pension invests members’ contributions according to environmental, social or moral criteria.
It may avoid sectors such as tobacco, weapons, gambling or fossil fuels, favour companies with stronger environmental and employment practices, and invest in areas such as renewable energy or social housing.
There isn’t one standard definition, so check the fund’s policy and holdings.
Can employees choose their workplace pension provider?
The employer normally selects the provider, so employees can’t usually ask for contributions to be sent to a different scheme.
Most providers do offer a choice of investment funds. Employees can also ask their employer to review the scheme and explain the ethical options available.
Is a sustainable pension fund fossil-fuel-free?
Not necessarily. Some funds exclude most fossil fuel companies, while others keep selected holdings and use voting and engagement to push them towards cleaner energy.
Look beyond labels such as sustainable, responsible or climate-aware and check the fund’s exclusions and holdings.
Do ethical workplace pensions cost more?
Sometimes. Funds using active management or investments such as renewable infrastructure may carry higher charges, although many ethical funds cost the same as standard options.
Compare the full cost, including fund charges, administration fees and any fixed monthly amount.
This article is for information and doesn’t constitute financial advice. Employers remain responsible for ensuring that their workplace pension meets their legal duties and is suitable for their workforce.
