Pensions - FAQs
Here are some questions you might have about sustainable, responsible and ethical pensions.
Get in touch if you have any other questions and we'll be happy to try and answer them.
IMPORTANT: We are calling ethical, sustainable and responsible pensions ‘good’ pensions here. But please remember that there are lots of other things – like cost, performance and customer service – to consider when deciding what makes a pension ‘good’ FOR YOU.
Your pension provider invests your money in companies with the aim of (fingers crossed) earning profits to give back to you at retirement.
Ethical, sustainable and responsible pensions are different to others because they actively either try to avoid investment in companies that harm people and the planet, or choose to invest in companies that try to make a positive difference or behave in a sustainable way.
This includes avoiding companies that behave in ways not possible for much longer due to changing attitudes - like burning coal or not doing enough to ensure their workplace is diverse, including women holding top jobs. Or companies that aren’t supporting The Global Goals to end poverty, inequality and the climate crisis.
We are calling ethical, sustainable and responsible pensions ‘good’ pensions. Though please remember that there are lots of other things – like cost, performance and customer service – to consider when deciding what makes a pension ‘good’ FOR YOU.
It’s good to remember that all types of investment can go up or down. Just because a pension is ethical or sustainably invested doesn’t mean it is guaranteed to perform well, but the good news is that sustainable options can outperform other types over the long term, even through unpredictable stock market conditions.
Your current pension provider is likely to have a ‘good’ pension option. NEST, for example, have an ethical fund you can choose and it’s easy to switch.
If they don’t have an alternative option, email your provider using our template to ask if they are looking at environmental and social issues when they invest your money. Providers MUST prove how they take account of these issues, not least because they often have a financial impact.
Steps you can take include:
See if your provider has an alternative, more sustainable, fund. If not, use our template [link] to ask if they are looking at – or intend to look at in the future - environmental and social issues when they invest your money.
Ask your employer to consider offering a sustainable, responsible or ethical pension fund to all their employees as standard (referred to in the industry as the ‘default scheme’).
It doesn’t make good financial sense to exit your workplace pension because you lose employer contributions. But you could consider supplementing your workplace pension with a personal pension more aligned with your values to increase your positive impact.
It will depend on the action you are taking. A fund switch in your existing pension is usually pretty quick and often completes in a couple of days.
Don’t give up! Keep in mind that having a ‘good’ pension is a fairly new idea for some people, but most employers want their staff to value their pensions and feel listened to.
Many company bosses take action to become more sustainable – like reducing waste and switching to renewable energy – yet don’t realise pension investment is another big way to help people and the planet. The person or department that deals with pensions at your work might be looking to make changes already – but at least you should get a response about what their plans are and what your options could be. Use our template email or write one of your own.
If they still aren’t interested, go directly to the pension provider using our template email.
Tumelo’s fab new website helps you see exactly which companies you own through your pension and personal investments and enables you to take action through voting, shareholder perks and more.
Tell your pension provider it is an issue you feel passionately about and that companies with female bosses seem to make bigger profits too.
For some people, choosing to save using a personal pension, including a Self Invested Personal Pension (SIPP) might be a way of investing in women. A personal pension can be opened easily online and gives you control over exactly which funds you invest in. Good with Money suggest that when choosing which platform to use cost should be a key concern. Go percentage based if not saving a huge amount. Go fixed fee if saving a lot.
In terms of choosing companies or funds based on gender equality - including in leadership - we really like Equileap as a resource for which companies are doing well (and not so well). Take a look and avoid funds that invest in companies that score badly.