Can I have an Ethical Pension?

An Ethical Pension is one where the investments inside your pension pot are carefully chosen to meet certain ethical criteria.  This involves selecting companies to invest in that make a positive contribution and avoiding those that harm society or the environment.

Many pension providers have a default allocation which you are placed into and this is likely to be a fund containing large UK and Global companies.  There may be an option to switch to a provided “ethical fund”, but this fund will be put together by the pension provider and their definition of “ethical” is unlikely to align exactly with yours.  For example some leading ethical funds include oil and gas companies and the world’s second largest mining company.

If your provider does not offer an ethical choice or a limited unappealing choice then it is possible to switch to one of the many pension providers that do.  Switching pension providers to access a greater choice of investments is one benefit of moving providers, but there are other potential benefits such as lower costs.  As part of an ethical pension review process, a good pension adviser will advise you on the suitability of your current and other potential pension providers and work with you to decide if it’s beneficial to switch.