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The latest statistics from Drewberry’s 2024 Workplace Pensions Survey reveal a key trend: 73% of UK employees want to invest their pension contributions ethically. These findings present an important opportunity for employers to support their employees’ desire for ethical pension options.
We’re going to explore the report’s findings and provide you with some actionable steps to meet the needs of your team. You can help your staff make a positive impact while securing their financial future.
Employees are increasingly conscious of ethical considerations in various aspects of their lives – from the products they buy to the companies they support. This heightened awareness extends to their financial decisions too, including how their pension savings are invested.
Our latest Drewberry survey found that 73% of employees want to invest their Workplace Pension contributions in an ethical way.
Many are actively trying to ensure their retirement savings are not invested in industries associated with unethical practices, such as weapons manufacturing or tobacco production. As a result, there’s a rising demand for ethical workplace pensions that invest in environmentally friendly and socially responsible companies.
And it’s not just ethical pension options they want, 8% of employees say a company with “eco-conscious and sustainable business practices” matters most to them when choosing an employer.
Alongside your Workplace Pension, there are other benefits to consider that support eco-initiatives, such as Cycle To Work and electric car schemes. And if you really want to prove yourself as an eco-employer, thinking about your employee benefits in line with B Corp Certification can go a long way in attracting a wider talent pool.
Attitudes towards sustainability are changing, and employees believe their employer should contribute to the planet’s wellbeing. Failing to cater your employee benefits to different needs and preferences could lead to a decrease in job satisfaction.
Joe ToftSenior Employee Benefits Consultant
One problem we identified in our report is that, even if employers do offer ethical Workplace Pensions, half of UK employees wouldn’t know how to access them.
Most Workplace Pension providers have at least one ethical fund option, so it’s possible your current scheme does have options for your staff. However, these findings make it clear that employees don’t know where to find information, which suggests a potential communications mishap.
We then asked UK employees which areas of pension education they’d be interested in. 38% of employees told us they’d like their employer’s support to find the right investment fund for their pension.
That’s over a third of the workforce, highlighting a strong opportunity for employers to provide better pension education and resources. This is something you can help with by supplying information about fund options.
Enabling employees to invest in a way that aligns with their values, you can benefit from attracting a wider range of talent when recruiting.
Nadeem Farid
Head of Health & Wellbeing Benefits
With 73% of employees wanting to invest their money ethically, it’s time to revisit your current Workplace Pension scheme to identify if it aligns with your organisation and employee values. Consider the following:
As part of reviewing your pension scheme, don’t forget to take a look at your communications strategy, too.
Many employers select the default fund option when setting up their workplace pension scheme.
However, the default fund may not reflect actual employee preferences. It aims to meet the average person’s attitude to risk and does not cater to individual needs.
Richard Noble
Senior Consultant, Employee Benefits
Our report shows that many employees don’t know how to access ethical funds. What’s more, only 24% say they fully understand their pension and, 25% have no idea who even provides their pension.
To ensure your team gets the most value from their pension, effective communication is key to help them understand their investment options and how to pick the right fund. You can support your employees by:
As employers are legally obliged to provide a Workplace Pension, many companies don’t give it much thought and set it up as quickly as they can. However, by approaching it more strategically and aligning the scheme with your employees’ values, you can turn a mandatory benefit into a highly valuable one.
To ensure your Workplace Pension is providing you and your workforce with the most value, it’s important to regularly review your scheme. Need help with this? Get in touch with one of our friendly pension specialists on 02074425880 or by emailing help@drewberry.co.uk.
Employee benefits can be a headache. But our specialists do this day-in, day-out, offering first class service when you need it most. Here’s why you should talk to us:
