Three-quarters of UK workers expect responsible pensions from their employer

13th February 2025

Nearly three-quarters (72%) of UK employees say it is important that their employer offers a responsibly invested pension*, new research from Scottish Widows has revealed.  

Yet despite this demand for responsible investing, almost half (47%) don’t know whether their workplace pension is actually invested responsibly. 

Scottish Widows’ Responsibly Invested Pensions Report has surveyed more than 6,000 employees, employers and financial advisers, to better understand their views of Environmental, Social and Governance (ESG) related issues. 

The report looks at how ESG factors are influencing people's investment decisions and expectations of their employers, suggesting a knowledge gap about responsible pensions and a divide in perceptions of the benefits they could provide. 

Demand for responsibly invested pensions 

Pension savers are concerned about the issues impacting the world into which they will retire, influencing how they expect their pensions to be invested, and their employers’ role in this. 

When asked about the biggest issues facing society today, the cost-of-living crisis topped the list for almost two-thirds (63%) of employees, with 49% believing this will be the biggest issue society faces five years from now. Other important environmental-related issues, including climate change (44%), plastic waste (37%) and water pollution (33%) closely followed as top concerns for employees. Social issues – including diversity, equity and inclusion – were also seen as some of the biggest societal issues among younger respondents (29% of those aged 18 and 34 vs 18% of those 55+). 

As a result, not only do 72% of people believe it is important that their current employer offers a responsibly invested pension, but 70% said their employers’ social responsibility credentials or benefits were important in choosing their current role. 

Younger employees place an even greater emphasis on responsibly invested pensions. Over three-quarters (79%) said it is important for their employer to offer a responsibly invested pension, compared to 61% of those aged over 55. People don’t just want their employers to ‘talk the talk’ when it comes to responsible pensions; two-thirds (64%) expect their employers’ environmental and social responsibility commitments to be reflected in their pension portfolios.  

Barriers to adoption 

While the report highlights strong employee demand for responsible pensions, lack of awareness and education remain key barriers. Nearly two-thirds (61%) don’t know how to switch from their default pension to an alternative investment option that may be better suited to meet their objectives. 

Less than a quarter still have concerns about whether responsible pensions have comparable returns to traditional investing (23%) or whether they cost more (21%). One in four (25%) have stated that they do not have enough information about responsible pensions to understand their cost and benefits – raising concerns that more needs to be done to educate and engage people with responsible pensions, and fulfil their investment demands. 

Last month Scottish Widows announced that it was embarking on a new strategic partnership with leading asset manager Robeco to shape its investment offering for UK pension savers, with responsible investing fitted as standard. 

Eva Cairns, Head of Responsible Investment, Scottish Widows, said: “Employees are increasingly seeking to make sure their investments – including pensions – deliver financial return while considering the impact on people and planet, and there is clear demand for more responsibly invested options. We know pension savers are concerned about financial security and believe that considering risks and opportunities related to ESG can help build more resilient investment portfolios – but it’s also about contributing to a more sustainable future, tackling some of the societal issues people care about.  

“There’s still a big knowledge gap to tackle, and employers should not only offer responsible pensions, but also do more to empower employees with the information they need to make more informed decisions. 

“We’re committed to helping bridge this knowledge gap and ensuring that every pension saver can invest with confidence in a way that reflects their priorities, whilst also delivering the best possible return on their investments to ensure they are financially set up for their retirement.” 

Download full press release (PDF, 160KB)

Read the full report here (PDF, 2MB)

Notes  

Methodology 

Research was conducted by Opinium on behalf of Scottish Widows, surveying 4,712 employees and self-employed workers, 2,000 HR decision makers at UK businesses and 189 financial advisers based in the UK, from 1st October 2024 to 11th October 2024.  

*A responsibly invested pension is a pension fund that incorporates environmental, social, and governance (ESG) factors into its investment decisions, meaning it prioritises companies with strong sustainability practices while aiming to achieve competitive financial returns alongside positive social impact.  

About Scottish Widows 

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With more than £226bn assets under administration and 10 million customers, Scottish Widows’ award‐winning product range includes workplace and individual pensions, annuities, life cover, critical illness and income protection, as well as savings and investment products.

More than 2 million customers access Scottish Widows products and services through the Lloyds Bank and Scottish Widows apps, in addition to accessing directly through independent financial advisers. The Scottish Widows Platform is trusted by more than 18,000 advisers and 5,400 advice firms, that manage the pensions and investments of almost 166,000 clients.