Pension savers appear to largely be in the dark in regards to how responsibly their pension is invested, Broadstone has said.

Analysis of Financial Conduct Authority (FCA) data by the pensions, investments and employee benefits consultancy has found that just 17% of defined contribution (DC) savers said they were sure their pot was being responsible, with a quarter (26%) saying they assumed so but were unsure.

Furthermore, Broadstone found that four in 10 (40%) DC savers admitted they did not know whether their pension was being responsibly invested.

Among those who said their pension was being invested responsibly, or assumed it was, two-thirds said they did not make an active investment decision, but just assumed that either their pension provider invests this way (33%) or their employer chose a pension provider in order to invest in this way (33%).

Further statistics from the FCA have shown that nearly two-thirds (63%) of DC savers said they feel or would feel more engaged with their pension overall if it was responsibly invested, with four in 10 (40%) stating that they would pay more into it as a result.

Head of DC workplace savings at Broadstone, Damon Hopkins, said: “Responsible investment is fast becoming well and truly entrenched in the design and selection of pension investment strategies – and rightly so.

“However, the type and extent of integration of responsible investment factors varies significantly and many pension savers are blindly assuming their pension is invested responsibly, banking on the good intentions of their employer or pension provider.

“We expect scrutiny over responsible investing to intensify amongst savers, so providers and employers (and their advisers) will need to be able to clearly evidence and articulate their investment profile and its wider ESG benefits.

“As this issue snowballs in prominence we believe it could become a key area of risk and differentiation, as savers increasingly focus their savings in investments that provide long-term real returns and make a positive difference to society and the environment.”

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