Where Is Your Pension Invested?

Where Is Your Pension Invested?

By CIRCA5000 TeamBack to Mission Control

Lucy O’Boyle • Pensions • 2 min read

Every person in the UK with a workplace or private pension will have their pension money invested. Growing the money that you pay into your pension pot is the goal, so savings are invested with the aim that those investment gains will leave you with more money than you put in.

Pension providers then invest the money from the pension pots that they manage into bonds, private equity and company stocks. But pension providers often don’t tell their customers exactly what their money is invested in.

If you dig deeper into these funds, you might find that your money is invested in fossil fuels, deforestation and gambling (MMM). 

Pensions linked to deforestation on a mass scale.

According to ground-breaking research from Make My Money Matter (a movement creating awareness around how pensions are invested) — the scale of pensions linked to causing environmental devastation is huge.

In the UK alone, £300 billion of pension fund investments are in companies and financial institutions with a high risk of driving deforestation (MMM).

What does that mean for the average pension holder?
Well, according to the research, if your pension is invested with a provider that doesn’t screen out these companies, then £2 of every £10 saved in UK pension pots is linked to deforestation.*

If your pension is contributing to deforestation, then moving it to a different provider or fund could prevent your money from causing more harm to the planet.

Your money has more power thank you think.

You have the choice of whether you would like your money invested in funds that might include tobacco, fossil fuels and deforestation, or in funds that exclude all of those things.

At CIRCA5000, we don't only exclude investing in activities that are negative for the planet, we invest in companies actively doing good, like clean energy, green transport, and health care. For example, our funds include companies such as Vestas (wind energy), Oatly (dairy-free oat drinks) and United Therapies (groundbreaking biotech). We genuinely believe that there is a long-term financial opportunity to invest in sectors that will benefit from structural market trends and grow as the world moves towards a net zero future. The objective of impact investing is to move money towards the companies doing good with the intention to also make a financial return. 

We’ll leave you with this stat, that we find mind blowing. A green pension is 21x more effective at cutting carbon emissions than stopping flying, going veggie and switching energy providers combined (MMM). 

With that stat in mind, switching your pension provider could be the most impactful thing you do to fight climate change. 

*Based on an average Direct Contribution scheme pension pot of £30,000 containing 70% public equity/corporate bonds. (MMM - page 18) 

When investing your capital is at risk. You should carefully consider whether opening a CIRCA5000 pension or transferring your old pensions to CIRCA5000 is right for you.  Please note that tax rules and reliefs depend on your personal circumstances and might change. CIRCA5000 does not provide financial or tax advice and you are responsible for your own tax reliefs/payments.

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