A Guide to Ethical Pensions

As a society, we are becoming ever more conscious of how our choices affect the environment and the wellbeing of others around the globe.

If you are concerned about your personal impact on the wider world, it is important to consider ethical pension options whenever you can. This can even apply to how your pension funds are invested.

In August 2021, studies revealed that an impressive 72% of those saving for retirement actively considered the ethical aspects of a scheme before committing to it.

 

So, how do you arrange an ethical pension – and what does this even mean? In this article, the team at Hilltop Finance explains the basics of ethical pensions and how you can arrange one.

 What Does it Mean to Have an Ethical Pension?

The term “ethical pension” tends to refer to how a scheme invests your savings.

According to the Financial Times, the concept of responsible investment can be broken down into the specific approaches of ethical exclusion, responsible practice, sustainable solutions, and impact funds.

To this end, ethical pension funds carefully select renewable or environmentally friendly assets and organisations that pursue ethical endeavors, including fair trade, low carbon emissions, and other socially responsible activities.

Depending on the options selected, pensions can go a long way towards tackling global warming, paying fair wages, and ensuring proper business practices are followed.

If you are already paying into a personal pension or have old workplace pensions, you might decide to transfer your savings into a more ethical scheme when you find one.

 What are the Most Ethical Pension Funds? 

The most ethically sound pension funds put potential investments through a series of checks before deciding whether or not to use your money in a certain way.

These checks usually cover an organisation’s environmental practices, social impact, and governance. These are known as ESG principles.

Speaking with a pension adviser will help your choices for ethical investments. They will always investigate whether or not the provider they are considering is undertaking ESG checks and whether the funds and provider are suitable for your needs and values.

You may also seek a provider that does not invest in fossil fuels and non-renewable energy or prioritise organisations that promote human rights, fair labour or low-carbon emissions.

 

 How to Find Out if Your Pension is Ethical

It’s easy to find out about the environmental and societal impact of your existing pension provider. Firstly, you can visit their website to find out the details of the scheme into which you are paying. If they are ethical pension providers, the provider will likely mention this.

You can also conduct internet searches into a provider’s track record and check out reviews of their services to find out more.

You may also contact your provider through their website or via phone or email to ask them directly about their ethics.

If you are unsatisfied with the response you receive or the information you find, it’s straightforward to search for green pension funds and socially responsible schemes online.

However, one of the very best approaches is to contact a trusted financial advisor who will be able to conduct this research on your behalf, narrow down the best schemes, and advise which is best for you. With their expertise and knowledge, they could find better suited ethical funds that can give you the flexibility and growth you require for your retirement plans.

Hilltop Finance are experts in pensions and investments. They will work transparently and proactively alongside you to help you switch to a socially responsible or “green” pension – so you can feel better about the lasting impact you have on the wider world.

Whatever your preferences or requirements regarding ethical pensions, Hilltop Finance will advise you of the most suitable options available for you at all times. Contact us today for a free, no-obligation consultation regarding your pension.