Have you ever thought of yourself as an investor? You may not realise that every time you make a pension contribution you are actually investing in the stock market. A recent survey by Fidelity International found that around half of UK respondents in the 20 to 34 age range don’t realise their retirement savings are invested.
Thinking about your pension when you’re young is important. Retirement seems a long way off, and many of us think we’re never going to retire, but regardless of when you stop working your pension is the biggest investment of your life. And you can use it to help invest in an environmentally sustainable future as well as your financial security.
Here are three reasons why you should use our forthcoming pensions assessment app to check if your pension is invested sustainably.
1. Setting goals for your future
Think of the reason why you’re investing and saving. You may be saving for an emergency fund, or planning for a house deposit. When it comes to retirement savings you actually may not know how much is being put aside by yourself, or your employer. That’s ok – a lot of people are not sure about this: around half of the 20 to 34 year olds surveyed by Fidelity International for example.
You might want to ask yourself what sort of future your money is helping to create. You may want to use it travel the world some day – but what kind of world will be there for you to see? You may want to use it to spend more time gardening – but in what kind of weather will you be doing it? Our app will help you understand your options for ensuring your pension helps make a future world you will want to live in.
2. Thinking like an investor
Let’s think about what you’re currently investing. When you were automatically enrolled into a pension plan by your employer you were probably put into what is called a ‘default investment’ scheme. These investments are very unlikely to be green.
You could arrange a meeting with a financial advisor, or think about choosing your own funds. But this can be confusing for those who don’t know where to start.
Go Invest Green can tell you what is the state of your current pension fund, and some of the green funds you could switch to. You may get a nice surprise: your pension may be good enough, with the default fund aligned to your values.
3. Securing good returns for you and the planet
Investing in sustainable assets secures returns at least as good as stocks that aren’t green. In fact, funds with good ‘Environmenal, Social and Governance’ (ESG) ratings have continually outperformed the market over the past 10 years.
To take one example, the value of the Danish energy company Orsted, which has switched to renewables from oil and gas, has soared in recent years. Think about the amazing growth prospects of all the new technologies being developed to power the transition to a sustainable world. If you choose your investments wisely you can fund a secure retirement and help green the planet.
Go Invest Green can’t guarantee you’ll be rich – the value of shares can go up as well as down – but we’re here to help. Thinking about where your money is going is important. We are constantly tracking our spend and limits via online banking. So why wouldn’t we as Millennials or Gen Z think like this with our pension? Our pension app will be ready soon to help.