More than half or 53 per cent of UK savers prefer their pensions to be invested in the UK, according to PLSA research.
According to the research, 16 per cent would prioritise UK investments even with lower returns, whilst 37 per cent would support them if returns were comparable.
However, only 13 per cent of savers are sure that their pensions include UK investments, and 63 per cent are unsure of where their money is invested. Just 23 per cent of DC savers and 25 per cent of DB savers are aware of where their money is invested. Furthermore, only 37 per cent of DC savers are confident in their investing choices, and another 37 per cent are uncomfortable with them.
According to the PLSA, pension providers and the government need to improve financial literacy in order to close this knowledge gap. Savers are also impacted by climate worries; 70 per cent are concerned about its effects. However, only 19 per cent of DC savers would tolerate lower returns for greener investments, although 31 per cent prioritise financial gains and 50 per cent could consider it if the impact is substantial.
Pensions and Lifetime Savings Association director of policy and advocacy Zoe Alexander says: “It’s striking that UK investments are proving to be a preference for many savers. Pension schemes are already thinking hard about how to invest more in the UK in ways that will deliver strong returns.
“The Government has a key role to play in creating the right conditions, helping to deliver the right UK growth assets for schemes to invest in, at the right price. And employers need to be encouraged to choose schemes for their employees that are delivering the best value overall, rather than just looking at the headline price, because the type of UK investments schemes are looking at can be more expensive, albeit with the potential to deliver strong returns.
“By working together, the Government and the industry can ensure pensions drive both strong financial futures for savers and sustainable growth for the UK economy.”
