How to Transfer to an Ethical Pension

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by

James Walters
in

Here we look at; Is Your Pension Funding Climate Chaos?; What to Consider When Comparing Private Pensions?; and, How to Transfer Your Pension? This is part of our campaign to #VoteWithOurMoney with 6 Steps to Help Stop Climate Change, one of over 40 ideas in our Sustainability Roadmap, and part of our series on Living Sustainably.

If you already know that you don’t want you money to be invested in fossil fuels and climate chaos, here are the options to switch to an ethical and sustainable pension:

  1. Check out the Ethical Consumer Ethical Pensions Product Guide
  2. Choose an ethical Independent Financial Advisor

If you want some more facts before making any decisions, let’s get into the details:

Pension funds are still heavily invested in fossil fuels, and that means they’re funding climate change.

And if you don’t think your pension alone can influence businesses and help climate change, what about all UK pension pots combined?

Imagine being able to #VoteWithOurMoney and being part of a pot of £6.1 trillion.

Well, if you’re lucky enough to have a pension then you are already part of that £6.1 trillion pot of money being invested in businesses, which means you already have the ability to influence your future and the future of humanity.

If you’ve already Switched to an Ethical Bank Account, the next step is to consider your pension.

Moving to a green, ethical, or sustainable pension is a fantastic way to #VoteWithOurMoney by showing businesses that you want to help climate change.

When we #VoteWithOurMoney we show the world’s biggest fossil fuel companies that they have to change direction, quickly.

Getting the world’s biggest polluters, the businesses that have the largest global footprint, to switch from damaging our future to securing our future is one way to significantly help stop climate change. We need to encourage or force them to change.

Yes, some fossil fuel companies are the villains in the story of humankind. Not just because they’ve sold fossil fuels—let’s not forget that we’re responsible for buying the products that are produced from fossil fuels—but because some of the fossil fuel companies have been involved in climate denial propaganda that has kept us locked in a world that has been reliant on fossil fuels. A world that could have transitioned to renewable and green technologies many years ago.

Those fossil fuel companies must not be let off the hook. It’s important to know the truth so we can decide what choices we make in the future.

This video on WaterBear gives a quick heads-up about the companies behind climate denial since the 1970s [10-minute video and it’s free to watch] S1, E2: Episode 2: Climate Denial: 50 Years of Lies & Misinformation or watch the YouTube video below:

https://www.youtube.com/watch?v=168je2cRoN8

Those companies should pay for their involvement. Those companies can also be some of the fastest ways to help stop climate change, as long as they move from profit at all costs (even if those costs mean the end of humanity) to sustainable profit that benefits people and planet.

Is Your Pension Funding Climate Chaos?

If you already have a private pension, it’s best to find out if your pension pot is contributing to climate change.

Be careful because there is a lot of confusing marketing spin from pension providers that get some of the worst ethical ratings. Just because the pension fund says ‘sustainable’ that doesn’t mean it’s helping climate change. One example is Scottish Widows pensions.

It’s always best to get advice from an Independent Financial Advisor, such as Sacre Associates.

You can find an Independent Financial Advisor using Unbiased or you can go a step further and use The Ethical Investment Association to make sure you get an advisor that knows about genuinely ethical and green investments.

Ethical Consumer also has a helpful article on Choosing an ethical Independent Financial Advisor.

Once you have a shortlist of Independent Financial Advisors, it’s worth making sure they’re authorised by using the Financial Conduct Authority register.

What to Consider When Comparing Private Pensions?

Pensions are a life changing decision in terms of your future as well as the future of humanity. What’s the point in having a pension pot if we don’t have a world to live in?

Switching to a sustainable pension might not be enough for it to help climate change. Is the pension ethical? Is it green?

Getting the right Independent Financial Advisor is a great start, but it’s also helpful to know what to look out for, so you can double check the advice that you’re given.

It’s worth considering:

  1. Does the pension support industries that contribute to climate change?
  2. Is there a clear exclusion policy for unethical sectors?
  3. Is the fund invested in carbon intensive sectors?
  4. Is the provider and fund transparent about where your money is invested?

It’s also worth being familiar with the language that pension providers use. Let’s take a look at a few of the pension buzz words…

What Is a Green Pension?

Green pensions are those that truly, not just through marketing spin, are environmentally responsible.

They exclude companies involved in the fossil fuel industry. Not just the fossil fuel companies themselves, but the companies that supply the industry.

This is where it’s important to have a good ethical financial advisor, because there are so-called green funds that have investments linked to fossil fuels. Ethical Consumer found that PensionBee’s green “fossil free pension fund” has investments in companies that provide services to the oil and gas industry.

Is a Sustainable Pension Different from a Green Pension?

Some green pensions may specialise in environmentally specific companies, such as wind and solar.

To broaden your options you might also look at pensions that are ESG (environment, social and governance), or SRI (socially responsible investment). ESG and SRI could include green funds with the addition of funds in other sectors.

Whatever pensions you look at, it’s good to check they’re signed-up to the United Nations’ Principles for Responsible Investment (PRI) as it shows a commitment to responsible investment.

You can also check if the fund managers are signatories of the UK Stewardship Code 2020, which is a benchmark for sustainable investment.

One example is Standard Life Responsible investment based on the United Nations-supported Principles of Responsible Investment (PRI) and the UK Stewardship Code.

There’s also the The People’s Pension Ethical Fund:

The People’s Pension Ethical Fund
SOURCE: https://thepeoplespension.co.uk/investments/ethical-fund-factsheet/

Planning Your New Pension Provider

Before committing to a new pension or transferring your existing pension, it’s worth checking the Ethical Consumer Ethical Pensions Product Guide as it includes ratings and research into all of these pension providers:

  • Aegon
  • Aviva
  • Fidelity
  • Legal & General
  • LV
  • Old Mutual Wealth
  • NEST
  • The People’s Pension
  • Prudential
  • Royal London
  • Scottish Widows
  • Standard Life
  • Virgin Money

Once you’ve completed your research, setting up a new pension or transferring your existing pension to a green, sustainable, or ethical fund is a simple task if you work with the right Independent Financial Advisor.

You’ll sign some paperwork to give them authority then they’ll handle the rest, getting your approval at each stage.

Here Is What You Can Do

Want to Continue Your Journey?

Where Next?

There is so much inspiring information to give you ideas of how to help climate change by growing, eating, and living sustainably, you can:

  1. Read Our Articles
  2. Sign-Up to Our Free Email Newsletter
  3. Get Started and Vote with Your Money
  4. Try the Sustainability Roadmap
  5. Use the Company Directory
  6. Support Nafford Junction

Help Us Inspire Others

If you are passionate about helping climate change, please consider supporting Nafford Junction, you can:

  1. Become a Patron to Give Regular Contributions
  2. Buy Me a Coffee to Make a One-Off Contribution
  3. Create for Us and Publish Thought Provoking Content
  4. Become an Inspiring Leader and Advertise with Us
  5. Go to NaffordJunction.co.uk/support

Sources Used to Create This

  1. #VoteWithOurMoney and Help Stop Climate Change
  2. Sacre Associates LLP
  3. Unbiased – Find an Independent Financial Adviser
  4. EIA
  5. Choosing an ethical financial advisor
  6. Financial Services Register
  7. Ethical Pensions | a guide form Ethical Consumer
  8. A guide to carbon divestment for your personal finances
  9. An introduction to green investment funds
  10. PensionBee’s ‘Fossil Fuel Free’ plan linked to oil and coal industry
  11. Signatory directory
  12. Financial Reporting Council
  13. Sustainable & Responsible Investing | Guide
  14. Ethical Fund factsheet

Production Notes

This was produced by me, James Walters, as a personal project to help stop climate change by inspiring others to grow, eat, and live sustainably.

Any advice given is the opinion of those involved and does not constitute medical, financial, or legal advice.

* We include links we think you will find useful. If you buy through those links, we may earn a small commission. It’s one way to support our work and to inspire as many people as possible.