Standard Life has announced a series of changes to its largest default pension funds that will see £15bn of assets and 1.5 million pension customers moved to sustainable multi-asset strategies.

The provider’s sustainable multi-asset strategies will be embedded into its largest default funds, Active Plus and Passive Plus, and for members of its master trust schemes.

It aims to help employers and trustees meet their member and regulatory needs while achieving good outcomes for members and enhancing returns over the long term.

Standard Life said it would achieve improved returns by taking appropriate levels of risk earlier and optimising glidepaths to manage that risk.

The growth-focused sustainable investment solution will be largely passive and contain 80 per cent or more environmental, social and governance (ESG) growth assets within the asset class.

Greater equity investment will be introduced early in the accumulation phase of the retirement journey through updated lifestyle profiles.

Standard Life provided an example that showed the typical asset allocation would contain 79 per cent growth assets, up from 49.4 per cent, while defensive assets would fall from 32.1 per cent to 9.6 per cent.

The provider added that charging for the passive investment solutions would see a reduction in the annual management charge for members of the two largest default funds.

Standard Life’s sustainable multi-asset strategy will become the default for around 9,000 workplace pension schemes, with roll out happening throughout 2022.

“The enhancements we are making will look to achieve growth earlier in the investment process, with the balance of a suitable glidepath for pension scheme members to help them aim for the best possible outcome when they come to retire,” said Standard Life head of investment solutions, Gareth Trainor.

“Our investment thinking and philosophy is continually evolving to reflect prevailing market and societal factors. We are focused on taking a financial approach to sustainable investing, which means taking the right amount of investment risk at the right times for all our pension scheme members.

“We are delighted that we’re set to embed our enhanced growth, sustainable-focused solutions for our pension scheme members in 2022, beginning in February for master trust members.”

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