The majority (86 per cent) of Gen Z, ages 18-29, would prefer to accept lower pension returns and to work beyond retirement age, rather than invest in industries they view as socially or environmentally harmful, research from Moneyfarm has revealed.

The research found that 73 per cent of Millennials, ages 30-44, and 34 per cent of the general population said the same.

In regard to what Brits do not want their pension money invested in, the tobacco industry topped the list of sectors (44 per cent), followed by alcohol (31 per cent) and 25 per cent said defence and ammunition.

In addition to this, 22 per cent of respondents said they did not want their pension money invested into fast fashion, while 21 per cent said oil and gas.

However, 31 per cent of respondents said they had no issues or worries about investing in any sector.

However, the research revealed that investment returns were more important to financially worried Brits, with 60 per cent admitting this was the priority when selecting a pension plan compared to a scheme that has environmental and climate concerns in mind (28 per cent).

It also revealed a difference in attitudes between age groups as 90 per cent of Gen Z proactively ensure they are not invested in funds that do not align with their values, while 64 per cent of those approaching retirement said the same.

Furthermore, 35 per cent of the nation does not currently have an ethically invested pension plan and 33 per cent were not sure if they have one or not as it has never occurred to them to check.

More than half (52 per cent) said they would not have a clue how to find out if they had one.

Despite three quarters (76 per cent) of the nation claiming that the care where their pension money is invested, 42 per cent of Brits have no idea which industry sectors their retirement savings are being allocated to fund.

Meanwhile, 43 per cent do not realise they can choose where their pension savings are invested.

Commenting on the figures, Moneyfarm technical pensions expert, Carina Chambers, said: “The research found that the likely reason for this is that the majority of people (54 per cent) are auto-enrolled into a workplace pension which, by default, typically puts them into a standard plan which they don’t then go into and amend and select funds which are more personal and tailored to their values and aspirations.

“But people can change the fund their workplace pension is invested in by contacting the provider directly.”

In addition to this, Chambers said that Moneyfarm found that 23 per cent of people asked were using a pension advisor to help select a pension plan for them.

Moneyfarm said that worryingly it seems where pension savers' money is being invested was not only what Brits are in the dark about.

Over half (56 per cent) had no idea what the value of their pension would be when they retire, while 43 per cent admitted they do not have a clear strategy on how they can get the most out of their pensions for retirement.

Meanwhile, 59 per cent said they do not know what risk portfolio their pension is in.
Given this, Moneyfarm said it was no “surprise” that 76 per cent of Brits find pensions confusing with those aged between 45 and 59 years old the most confused.

“Whilst contributing to a pension is a crucial step towards financial security, this research shows that the investment choices that drive the growth of those funds often go unexamined,” Chambers continued.

“We also see the generational divide in attitudes towards ethical investing is striking.

“While Gen Z shows a strong preference for aligning their investments with their values, even at the cost of financial returns, older generations who are that much closer to retirement, tend to prioritise higher returns over ethical considerations.

“Ultimately, understanding that we have control over how our money is invested can empower people to align their pensions with their values and long-term financial goals, helping them make more informed decisions about their financial future.”

---