Choosing a pension for your team means thinking about the future they’re saving for, as well as the money they’ll have when they get there.
Their savings could be invested in companies linked to fossil fuels, weapons and deforestation. They could also support renewable energy, social housing and businesses tackling environmental and social problems.
Most employees stay in the default fund: the investment option chosen for anyone who doesn’t make their own selection. That makes it especially important to understand what it holds.
These seven workplace pension options have features worth considering, from sustainability-focused defaults to more tightly screened ethical funds. We’ve looked at their investment approaches, charges and the choices available to staff.
How we use the Good Money Test
Our Good Money Test asks where your money goes, how transparent the provider is, whether it supports positive change, how it treats customers and whether its actions match its claims.
For workplace pensions, we also consider charges and whether members receive the ethical approach automatically or need to choose a different fund.
Our verdicts are editorial assessments, separate from Good Egg accreditation. Inclusion doesn’t mean every fund offered by a provider meets the same ethical standards. The order below isn’t a ranking of investment returns.
Ethical workplace pensions at a glance
| Provider | What stands out | Good Money Test |
|---|---|---|
| Nest | Broad access and a clearly explained Ethical Fund | Pass, with reservations |
| Smart Pension | Sustainability built into its main default growth fund | Pass, with reservations |
| Pangea Impact Investments | A dedicated focus on positive impact | Pass |
| Aviva | A choice of ethical and sustainable funds | Pass |
| Royal London | Sustainable fund choices from a customer-owned provider | Pass |
| Cushon | An accessible app and investment in environmental and social projects | Pass, with reservations |
| People’s Pension | No shareholders and a tightly screened Ethical Fund | Pass, with reservations |
Nest
Good Money Test verdict: Pass, with reservations
Nest accepts employers of almost any size and publishes useful information about where members’ money goes.
Most members join its Retirement Date Funds, which adjust the investment mix as retirement approaches. These apply responsible investment policies but aren’t fossil fuel-free.
Members can choose the Nest Ethical Fund for stricter screening. It avoids companies owning oil, gas or coal reserves and applies restrictions covering weapons, tobacco, alcohol, gambling, pornography, animal fur and cosmetics testing on animals. It also seeks investments supporting areas such as renewable energy.
Nest charges employers nothing. Members pay 1.8 per cent on new contributions and 0.3 per cent a year on their pension pot.
Watch out: The contribution fee takes £18 from every £1,000 paid in, before the annual charge. This upfront deduction deserves attention, particularly for people making sizeable contributions over a short period. Transfers into Nest don’t attract the contribution charge.
Good for: Employers wanting broad access and a clearly explained ethical option, while weighing up the contribution fee.
Smart Pension
Good Money Test verdict: Pass, with reservations
Smart Pension builds sustainability into its main default growth fund, helping it reach employees who never make an active investment choice.
The Smart Sustainable Growth Fund invests across different assets and aims to benefit from companies helping solve environmental and social challenges. Smart targets net zero by 2040 for the listed assets in this fund.
Its range also includes the Smart Ethical and Climate Fund, which screens out companies that breach its ethical criteria, plus impact equity, impact bond and Sharia options.
Charges depend on the scheme and funds. Members may pay a monthly fee alongside investment charges, while some employers also pay a monthly charge.
Watch out: A fixed monthly fee takes a bigger percentage from a small pot, which is especially worth checking for staff who leave after a short time. Smart says it doesn’t apply the monthly member fee where combined savings with it are £100 or less. Ask for the exact fee and what happens when contributions stop.
Good for: Employers looking for sustainability in the default, with close attention to charges on smaller pots.
Pangea Impact Investments
Good Money Test verdict: Pass
Pangea focuses on investments seeking solutions to climate change and social inequality. Its workplace approach builds sustainability into the default, so employees don’t need to research and select a separate ethical fund.
It assesses investment managers’ commitment to responsible and impact investing, their track records and whether their decisions match their stated aims.
Pangea has worked with Amundi on a workplace default designed to operate within auto-enrolment rules and the 0.75 per cent charge cap. It’s also a certified B Corp.
Through its Positive Pension Employer initiative, Pangea is encouraging B Corps and other businesses to bring their workplace pensions into line with their values. The focus is on changing the default investment option, so the approach reaches staff who never actively choose a fund.
Watch out: Pangea provides its investment solution through partners. Ask who runs the pension scheme, what the default holds and what members and employers will pay in total.
Good for: B Corps, charities and other organisations wanting positive impact at the heart of their pension’s investment approach.
Aviva
Good Money Test verdict: Pass
Aviva offers ethical and sustainable investment choices alongside its mainstream workplace pension defaults.
My Future Focus is the default for its Group Personal Pension and Aviva Master Trust. It spreads money across different investments and adjusts the mix as retirement approaches. Its Group Self-invested Personal Pension uses a different default, My Future.
For a more explicitly ethical approach, Aviva’s Stewardship funds screen out businesses considered harmful and seek companies contributing to its sustainability themes of Climate, Earth and People.
Members may also have access to ethical and sustainable funds from other managers. Choices and charges depend on the employer’s scheme.
Watch out: Check the specific fund’s policy and holdings. An ethical option within Aviva’s range doesn’t mean the same standards apply across its other funds or businesses.
Good for: Employers wanting a mainstream provider with a choice of ethical funds.
Royal London
Good Money Test verdict: Pass
Royal London is customer-owned and offers a sustainable fund range covering shares, bonds and a mix of the two. This gives employees options to match different levels of investment risk.
Its sustainable funds are managed by Royal London Asset Management, which assesses companies’ environmental and social contribution alongside their financial prospects. The underlying UK funds in the range have adopted the Sustainability Focus label under the UK’s sustainable investment labelling rules.
There’s flexibility within its Governed Range portfolios, too. Members can choose RLS Sustainable Leaders or RLS Global Sustainable Equity for the share portion at no extra charge for that substitution. The pension’s normal charges still apply.
Watch out: Choosing a sustainable share fund doesn’t make every investment in the portfolio subject to that fund’s criteria. Check the rest of the holdings and request the full scheme charges.
Good for: Employers wanting a customer-owned provider with established sustainable fund choices.
Cushon
Good Money Test verdict: Pass, with reservations
Cushon combines a sustainability-focused pension with an app designed to make savings easier to understand and manage. It became part of professional services group WTW in May 2026.
Its main default, the Cushon Sustainable Investment Strategy, invests in global shares and bonds, alongside projects such as renewable energy, social housing, forestry and clean technology.
Its policies include restrictions on controversial weapons and companies breaching international standards. Other exclusions vary between the underlying funds.
Cushon advertises no employer charge and member charges starting at 0.69 per cent a year, depending on investments. Existing scheme arrangements can differ.
Watch out: Compare the actual charges quoted for your workforce and check the exclusions. A sustainability-focused default isn’t necessarily fossil-fuel-free.
Good for: Employers who want staff to engage with their pension and understand what it helps finance.
People’s Pension
Good Money Test verdict: Pass, with reservations
People’s Pension has more than seven million members and no shareholders, with profits going back into supporting members.
Most members use its Balanced investment profile, which changes the investment mix as retirement approaches. The provider says 80 per cent of members’ money is in climate-aware investments.
Its optional Ethical Fund goes further. It excludes fossil fuel producers and screens out companies earning a substantial share of their income from sectors including tobacco, alcohol, gambling, weapons and unsustainable palm oil.
Members pay a 0.5 per cent annual management charge, with savings rewards on balances above £3,000. There’s also a £6.50 annual charge on pots of £106.50 or more.
Employers usually pay £500 plus VAT to join directly, with no ongoing employer fees. Setup is free through qualifying advisers and payroll services firms.
Watch out: The £6.50 fixed fee alone is equivalent to 1.3 per cent of a £500 pot, before the percentage charge. It takes a larger share of smaller savings, particularly when someone has left the scheme and stopped paying in. Members must also select the Ethical Fund for its stricter exclusions.
Good for: Employers attracted by its no-shareholder model and Ethical Fund, who also consider the cost to staff with small pots.
What does the Mansion House Accord mean for your pension?
Nest, Smart Pension, Aviva, Royal London, Cushon and People’s Pension have all signed the Mansion House Accord.
This voluntary, government-backed agreement aims for at least 10 per cent of the main defined contribution default funds to be invested in private markets by 2030, including at least five per cent of the total in UK private markets. Providers must still put savers’ interests first.
Private markets include investments such as unlisted businesses, property and infrastructure. The commitment could increase UK exposure in defaults, but it doesn’t tell you how ethical those investments will be. Renewable energy and social housing can sit within private markets, too.
Ask how new investments will be checked against the scheme’s environmental and social policies. If staff want stricter exclusions, compare the default with the specialist ethical options available. Signing the Accord alone isn’t a reason to switch funds.
Keep checking what the fund actually holds
A pension can keep the same name while its underlying investments change. A fund described as ESG, sustainable or ethical may still hold companies your team would prefer to avoid.
When a provider changes its investments, ask whether the replacement follows the same exclusions and sustainability aims. Compare the holdings as well as the charges and returns. Strong past performance tells you little about whether a fund matches your values.
Build this into your regular scheme review and ask how important changes will be explained to employees.
How to choose a workplace pension
Start with the default: what does it invest in, what does it exclude and how does it change as retirement approaches?
Then compare the full charges using both small and larger pots. A provider that looks good value for a long-serving employee may be less attractive for someone who leaves with a few hundred pounds saved.
Check payroll compatibility, employee support and the ethical fund choices. Ask for examples of how the provider challenges companies over environmental and social issues, and help staff understand the options available.
Frequently asked questions
What makes a workplace pension ethical?
Look at the actual investments, the industries excluded and whether the funds support environmental or social solutions. Pay particular attention to the default, where staff who don’t choose their investments will end up.
Does an ethical workplace pension cost more?
Not always. Compare employer and member charges, including contribution fees, fixed fees and fund charges. Ask what someone with a small pot would pay, including after they stop contributing.
Is offering an optional ethical fund enough?
It gives staff a choice, but only those who select it will follow its approach. If sustainability is a priority for your organisation, look closely at the default and explain the alternatives clearly.
Can an ethical fund change its investments?
Yes. Holdings and policies can change, so review the latest factsheets and notices. If a new fund replaces an old one, check whether it follows the same ethical standards.
This article is for information, not personal financial advice. Pension investments can fall as well as rise, and members could get back less than they invest. Charges and investment policies can change.
