How To Choose An Ethical Pension Provider

ethical pensions

When it comes to saving for retirement, choosing an ethical pension provider is a responsible and sustainable option. By following some simple tips, you can find a provider that invests in socially responsible portfolios and gives you ethical investment options.

What is an Ethical Pension Provider?

If you have a pension, do you know where that money is invested? It may be a surprise to learn that our money is often invested in tobacco companies, arms manufacturer’s, fossil fuels and other carbon intensive sectors like tree logging.

If you don’t have a pension and need to understand more about them, then you can visit other sites like money-saving expert for a detailed explanation. Gov.UK explains pensions as:

Money paid in by you or your employer is put into investments (such as shares) by the pension provider. The value of your pension pot can go up or down depending on how the investments perform.

An ethical pension provider is a company that has green investment objectives and makes ethical investments on your behalf. For example, they may invest in renewable energy infrastructure (wind and solar farms) rather than fossil fuel companies. Or they may focus on initiatives that support net zero carbon emissions.

Workplace Pension Scheme

If you earn over £10,000 your employer needs to enrol you in a workplace scheme. If you are part of a scheme, do you know if your money is invested ethically? Employees rarely ask their employers where their money is invested. If it matters to you, ask your employer. Your employer may not even know where the company pension pot is invested, yet it is one action that can make a huge difference to a company’s carbon footprint.

Whether you have a personal pension or a workplace pension, you can find one that focuses on ethical and sustainable investing.

Why Choose an Ethical Pension Provider?

There are many reasons to choose ethical companies to look after your pension plan. Perhaps the most important reason is that sustainable, green practices are the future of business.

Climate change is not going away so one of the most powerful ways we can effect change is through our pensions and the companies that look after them.

What are ethical funds?

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Ethical funds invest money in green energy projects or socially responsible companies. They are carefully chosen investments that do not harm society. This could mean investing in green energy projects or socially responsible companies with good environmental, social and governance (ESG) policies.

What are sustainable funds?

Sustainable pension providers invest money in a way that considers the environmental and social effects of their decisions. This could mean investing in community projects like housing or sustainable infrastructure projects (e.g. ensuring access to clean water).

What are socially responsible funds?

Socially responsible funds are a type of ethical fund that focuses on investments that have a positive social impact. This could mean investing in companies that are working to improve the environment and society e.g. helping local communities set up businesses or building schools in disadvantaged areas across the world.

Whatever your reason, choosing ethical pensions is a good way to ensure your retirement savings are responsible and sustainable.

How do I find an ethical pension provider?

find a pension
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There are a few ways to find an ethical pension provider. You can start by looking for providers that have been certified by independent organisations as ethical. You can also check out websites like make my money matter that sign post you to further information and advice.

Be aware that there has been an explosion of ethical investments otherwise known as ESG (Environmental, Social and Governance) investments in the market. To combat Greenwashing, the EU enabled the Sustainable Finance Disclosure Regulation (SFDR) to ensure companies were measuring their social and environmental impact within a set of defined rules. Whilst the SFDR rules do not apply to UK companies, it is worth checking pension products to see if they meet the EU’s rules.

How do I choose an ethical pension provider?

There are a few things to consider when choosing a pension provider. First, seek assistance from a financial adviser. You will be expecting a retirement income from any ethical investing you make so make sure the funds suit your situation.

Think about what else is important to you. Are you looking for a company that invests in renewable energy? Or one that donates a percentage of its profits to charity? It is important to do your research; not all pension companies are created equal, so it’s important to do your homework before making a decision. Do they have a good reputation?

Also consider the pension products themselves – does your preferred company offer a diversified portfolio so you can spread the investment risk?

Next, compare the fees and pension fund offered by different providers. It’s important to find a provider that offers low-cost investment options and meets your retirement goals.

Finally, read the provider’s terms and conditions carefully to make sure you are comfortable with their policies.

The benefits of using an ethical pension provider

benefits of being ethical
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There are a few benefits of choosing an ethical pension company. First, you can feel confident knowing that your money is being invested in responsible ways. Second, you may be able to get lower fees than you would from a traditional provider. Finally, using a provider with green values helps you stay accountable to your own values.

Make difference…with your pension

Finding a pension company that enables you to invest ethically is a powerful way of making a difference. When choosing a provider, it’s important to do your research and choose a company that suits your needs. By choosing a responsible pension provider, you can feel confident that your money is being invested in responsible ways.