Nearly half (46 per cent) of savers think that pension scheme default funds should integrate environmental, social and governance (ESG) considerations, according to research from Barnett Waddingham.

The survey found that 20 per cent of savers believe ESG should be integrated into the default fund regardless of returns, while 26 per cent thought it should be integrated only if the return was the same as a non-ESG fund.

A further 45 per cent of savers were indifferent to the idea, although only 9 per cent thought ESG should not be integrated at all.

Eight in 10 (80 per cent) pension holders remain in their default funds.

Barnett Waddingham also stressed that, despite most savers wanting their pension to be invested responsibly, very few auto-enrolled savers are actively moving their investments to sustainable funds.

Around 80 per cent of those with a workplace pension said that they have never made any changes to the fund they invest in, whilst 11 per cent had only made a change once.

Older members in particular were more likely to stick to their original fund choices, with 91 per cent making no changes, compared to 34 per cent against 18-34 year olds, which was the age group most likely to review their investments.

Women were also more likely to have stayed in the default fund, with 85 per cent not making any changes compared to 75 per cent of men.

Commenting on the findings, Barnett Waddingham policy and strategy lead, Amanda Latham, argued that the "onus shouldn't fall on individuals", suggesting that policymakers and employers should better default strategies rather than relying on pension holders to come up with them themselves.

She continued: “The UK is battling a bad case of inertia, with UK savers displaying a lack of confidence, ability, or knowledge around changing their workplace pension investments.

“But there’s no lack of appetite, and it’s the responsibility of the pensions industry to facilitate that appetite.

“The UK’s organ donation system is one of the most effective examples of opt-out policy in the world, but it’s a criminally underused tool when we’re looking to enact real change while protecting agency.

"By transitioning default workplace pensions to ESG funds, we’d see a tremendous impact on sustainable investing.

“As with the organ donation example, we’d likely also see a huge increase in conversation around pensions, prompting people to engage with their retirement savings and make their money matter.

"If the UK is going to be a leader in a greener world, there’s no time to waste – we need to follow the money and do what it takes to make change happen.”

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