Around 10 per cent of defined contribution (DC) pension savers’ money in the UK is invested in US tech giants, including Microsoft, Apple and Amazon, research from PensionBee has revealed.

The data showed that, assuming an average pension pot size of £20,000, a typical saver could have just over £2,000 jointly invested in these companies, colloquially known as the 'Magnificent Seven'.

Using data from three default pension funds, PensionBee, Nest and The People’s Pension, it found that pension savers have approximately £2,033 each invested in these household names.

This included an average of £437 in Microsoft, £420 in Apple, £353 in Nvidia, £286 in Alphabet – the parent company of Google – £218 in Amazon, £168 in Tesla and £151 in Meta – the parent company of Facebook.

PensionBee explained that pension funds invest in the big seven US technology leaders due to their usually consistent growth and resilience, acknowledging that these companies boast robust financial performance, global reach and a proven track record of innovation, making them attractive investments for pension funds seeking to secure long term returns.

Additionally, it said that their presence in various sectors of the economy, from technology and e-commerce to entertainment and automotive, offers potential diversification benefits, further enhancing the appeal for pension fund managers.

However, PensionBee noted that some pension savers have expressed concerns over the practices of some technology companies.

Indeed, PensionBee's analysis found that, when asked about issues including risk of misinformation created by generative artificial intelligence; the human rights impact of AI driven advertising practices and the human rights impact of AI deployment, between 60 per cent and 70 per cent of respondents said they would support resolutions aimed at addressing these issues.

And amid the build-up to this year's Annual General Meeting (AGM) season, PensionBee emphasised that investors will have several options to engage with companies and exercise their rights as shareholders, including attending AGMs and voting on shareholder resolutions.

It also suggested that savers may want to engage with companies they have investments in in other ways, aside from AGMs, including writing to companies personally, engaging with quarterly earnings calls where financial performance is discussed or taking part in investor advisory groups or committees to solicit feedback and input on various matters.

PensionBee chief engagement officer, Clare Reilly, stated: “At this year's AGM season, it's crucial to recognise that pension savers' interests are intricately tied to the activities of some of the largest companies in the world.

“Through our pension savings, we’re all investors in the biggest tech giants that dominate our everyday lives – from our smartphones to the convenient online marketplaces we use to shop.

“Whether or not we actively monitor our investments, our retirements, and even our ability to retire at all, currently hinge upon the fortunes of these companies. Part of the reason they feature so heavily in pension funds is their scale, but also their financial performance. Love them or loathe them, our lives are inexorably linked to their success.”

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