Millennials ‘would invest more into pensions for worthy investments’

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UK millennials would save more into their pensions if they felt it would benefit worthy causes, research has found.

Many in the 20s-30s age bracket feel disgust towards companies which they claimed had irresponsible investment practices, survey results suggest.

The views of 2,500 workers in that age bracket were collated by Adoreboard, a Queen’s University, Belfast-based technology firm which measures human emotions.

The research uncovered a wide disconnect between how millennials feel about their pensions and what schemes currently deliver, with only a fifth indicating they felt they were aligned with their values.

Almost half of the respondents (45%) would be willing to make additional contributions if they believed responsible investments were incorporated in pension funds.

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More than half (51%) believed responsible investing should be built into the default investment fund.

Of those willing to make additional contributions, the research claimed over two-thirds (70%) would contribute an extra 1%-3% of their monthly salary, while 14% would pay an extra 4%-5% – the equivalent of up to £1.2 billion a year.

Chris Johnston, Adoreboard chief executive, said millennial workers are more conscious about societal issues such as climate change.

“When reflecting on the link between companies and their values, people expressed high intensity emotions such as trust towards companies that take responsible investment seriously,” he said.

“Fundamentally, a better understanding of how employees feel can have significant business implications and in this case, billions potentially added to the future financial welfare of UK workers.”

Pensions expert David Whitehair, head of Franklin Templeton, added: “Our industry needs to stop seeing savers as statistics and better understand them as people.

“Through better aligning themselves with topics their members are passionate about, schemes can help drive engagement and ultimately look to boost contribution rates.”

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    1. Harsh reality dictates, to all but the extremely wealthy who can afford the luxury of indulging/displaying ‘conscience’, necessity of hard-headed financial investment by pension fund or otherwise. That means buying into good yielding shares in companies with expectation of stable medium term prospects. Many such companies are not ‘ethical’ e.g. arms sales, tobacco, oil, and exploitation of cheap labour.

      Under current societal arrangements it is every man for himself. Nobody will offer succour to people in self-inflicted penury resulting from ‘ethical’ investing. Therefore, I have investments in oil, tobacco, armaments, and other morally dodgy enterprise, along with staples such as retail outfits. The fund from which I draw pension does likewise and I have no say in its rather sound, financially rather than ethically, investment decisions.

      Distinction ought be drawn between buying extant shares in companies from their current holders and buying newly floated shares. For the latter one may indulge in refusal on ethical grounds whilst being aware that such decisions by small private investors have no effect on the greater scheme of things. Dis-investing on moral imperatives is foolish because if part of an orchestrated ‘movement’ one is likely to accrue a loss whilst persons of robust sentiment shall gain.

      The point arising from the foregoing is that individuals ought respond pragmatically to circumstances as they are rather than as they might be. That does not preclude supporting a movement, or political party, intent upon changing the rules of the game. Meanwhile, eschewing empty gestures is prudent.

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