People under 35 are nearly three times more likely than those over 65 to know where their pension is invested, with many younger savers taking a particular focus on ethical investing, research from OVO has revealed.

According to the energy supplier, just one in four people over 45 knew the sectors, funds or companies their pension is invested in.

The study also found younger savers are far more likely to want their pension invested ethically, with almost eight in 10 (78 per cent) under-35s saying it matters to them, compared to just over a third (34 per cent) of over-65s.

OVO suggested that for many 'Gen Z' savers, understanding where and how their money is invested has become a way to respond to climate concerns and financial uncertainty.

It noted that green pensions are one of the most impactful and accessible ways to support climate goals, reducing the amount invested in carbon-intensive businesses.

According to provisional estimates from the Department for Energy Security and Net Zero, switching to green pensions could cut 386 million tonnes of carbon - more than the UK’s total emissions in 2024.

However, only 13 per cent of people said they feel very confident in their knowledge of how to effectively reduce their carbon footprint, including through their pension.

Therefore, OVO urged employers to speak more openly about workplace pension options and to consider offering sustainable investment funds, which it argued could help attract young talent and improve employee satisfaction.

Commenting on the findings, OVO Energy director of people experience, Julia Diggs, said younger workers are increasingly seeking “transparency, impact, and a pension that reflects their values”.

She added that the research showed just how engaged the next generation is in terms of where their money is invested.

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