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What kind of world is your pension creating?

Your pension investments can impact the planet’s future as well as your own. Find out how responsible investing could drive global change as well as potential profit.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Sir David Attenborough’s ‘A Life on our Planet’, has created quite the stir in the pensions industry. Audiences flooded social media demanding change, echoing his stark message:

It’s crazy that our banks and our pensions are investing in fossil fuel, when these are the very things that jeopardise the future we’re saving for."

With pensions under the microscope, now could be the time to take more interest in yours.

Taking responsibility for your pension

There’s no question that our pensions will determine our individual future. But with around £7.31 billion invested in UK defined contribution pensions, they can make a big difference to the future of the planet as well.

The problem is two thirds of pension savers don’t know where their pension is invested. And unless you’ve chosen differently, or have your workplace pension with Nest, chances are yours hasn’t been invested with the environment or social responsibility in mind.

That’s why it’s important to take a look at your pension and decide what you want to invest in. Aligning your pension to your values can help drive global change, but it could also prove profitable in the long term.

For example, pioneering companies that make a social and environmental impact could be more sustainable than their traditional counterparts. And companies that fail to keep up with the trend towards greener energy might face restrictions and bad press in the future.

Our guide to responsible investment

How can you invest your pension for good?

‘Responsible investing’ means something different to each of us. It could mean avoiding certain industries and companies you’re not comfortable investing in. Or you could go further and invest in companies that actively seek to drive positive change.

To help you get started, here are 3 types of funds that invest with responsibility in mind:

  • ESG integrated funds – take account of environmental, social and governance factors when deciding what to invest in.
  • Exclusion based funds – won’t invest in industries or companies that don’t meet their criteria. Common exclusions include tobacco companies, or those in the arms trade, but some funds also avoid companies that damage the environment.
  • Sustainability-focused funds – invest in companies that are more sustainable than their competitors, or that are likely to benefit from the need for more sustainable goods and services.

How you invest should depend on your values, confidence and attitude to risk. And don’t forget the importance of spreading your money across different areas and investments. If you’re not sure if an investment is right for you, ask for advice.

How to build a Responsible Investment portfolio

Take control of where you invest your pension

Your pension can impact the future of the planet as well as your own, so it’s important it’s in the right hands. Yours.

Having the freedom to choose where you invest puts you firmly in control. But some older providers have a limited range of options, so you might not find an investment that ticks all your boxes.

If you’re not getting the wealth of choice you want, you could move your old pensions to the HL Self-Invested Personal Pension (SIPP). It lets you choose from a wide range of investments, so you can get your retirement savings working for good.

Before transferring a pension make sure you won’t incur excessive exit fees or lose valuable guarantees. Pensions are usually transferred as cash so you will miss out on any market rises or falls for a period.

Transferring to a SIPP

The HL SIPP is designed for people who are happy to choose their own investments. We provide guidance and tools to help you make your decisions. But keep in mind that this information and our website is not personal advice. If you’re not sure if an investment is right for you, our advisory service could help.

Get cashback as a thank you for transferring

If you apply online and transfer pensions worth £5,000 or more, you’ll get cashback as a thank you for choosing us. The more you transfer, the more you receive. Act by 10 January 2021 to qualify.

If you need longer to decide, let us know and we’ll give you an extra six months to transfer.

To keep your cashback all we ask is that you keep your investments with us for at least a year. Terms apply.

Find out more

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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