2021 PensionBee survey on consumer investment views

Summary

In March 2021 PensionBee ran its annual survey of customers in the Tailored Plan, where most customers are invested. This year there were c.1,700 respondents.

In 2020 the majority of respondents were clear that they wanted to balance making money with positive social outcomes. Many considered it appropriate to remove companies that manufacture banned weapons or break international laws on human rights, labour, the environment, and corruption. Their views were published in The Sunday Times with the headline ‘Ethical savers don’t want bombs in their pensions’.

PensionBee regularly surveys customers to make sure that its pension plans continue to be aligned with the changing investment expectations of savers. In survey feedback in 2020 customers also stated that that they no longer wanted to be invested in oil, resulting in PensionBee launching a completely new Fossil Fuel Free Plan later that year.

This year respondents expressed strong views that the companies in their pensions should treat their workers properly, with customers across all age groups and genders ranking the treatment of workers in core business and supply chains as a number one priority.

Additionally, 83% of respondents were clear that they expect the companies in their pensions to pay the Living Wage, and a majority also want companies to publish ethnicity and gender pay gaps. One female respondent aged over 51 commented that companies in her pension should, "Pay people a decent and proper wage and ensure working conditions are adequate as well as their hours,” while one male respondent aged 30 or under commented, "Discrimination is a huge deal breaker for me".

The majority of respondents also showed concern for the environment, with 76% supporting action on oil companies. One female respondent aged 41-50 remarked that she wants to invest in companies that are "Fair and sustainable. It’s the only way business will offer long-term returns. Not interested in short-term returns." Additionally, a male respondent, aged 41-50 commented, "Environment is very important to me so any business who is not doing anything to protect the environment is a no from me." Additionally, more than half of respondents agree with the view that fast fashion has a negative impact on society, including more than 80% of women aged 30 and under.

Most respondents agree that the coronavirus pandemic has made them feel apprehensive about whether they will have enough money to retire on, but also that they now feel more inspired to save and build up their pension. Women are slightly more likely to express both views.

Just a minority of respondents express the view that pension providers should focus only on making profit. One man aged over 51 commented "Despite all participation, sharing ideas, chasing ideals, the main goal must be to ensure, as much as possible, that investors can enjoy their retirement through the funds they have worked for all their lives and the money managers are handling on our behalf".

Overall, the respondents were broadly reflective of PensionBee’s customer base.

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Findings

1. The vast majority of savers (83%) expect the companies in their pension to pay all of their workers the Living Wage.

A third of respondents (33%) want companies that do not pay the Living Wage to be removed from their pensions at the outset. Almost another third (31%) want their pension to only invest in companies that commit to paying it in the future. A further fifth (20%) want to invest and use voting and selling to force change.

91% of women expect companies in their pensions to pay the Living Wage compared to 80% of men. Support is consistent across age groups.

One male respondent aged over 51 commented that he wants his pension to be “investing in companies that prioritise the welfare and wellbeing of their employees”, another male respondent aged 41-50 commented, "I would like to see companies that take a moral stand, for example companies that pay a living wage and companies that give back to their communities". A female respondent aged 41-50 commented that she wants to invest in “Purpose-led businesses that transform lives. Businesses which put their people and values at the heart of their culture. This drives improved performance, workforce happiness and growth".

On the other hand, one male respondent aged under 30 commented, “I wouldn't want money managers to avoid anything that will increase the size of my pension pot".

2. Most savers expect companies to publish pay gaps, with 62% of respondents showing support for the publication of gender pay gaps, and 57% for the ethnicity pay gaps.

"I expect companies in my pension to publish pay gaps"

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Total question respondents: 1666 (gender pay gap) and 1665 (ethnicity pay gap). Numbers have been rounded.

Support for gender pay gap reporting is more than 20% stronger amongst women, at 77%, compared to 55% of men. Similarly, 72% of women expect companies to publish ethnicity pay gaps, compared to 50% of men.

"I expect companies in my pension to publish pay gaps", by gender

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Total question respondents: 1666 (gender pay gap) and 1665 (ethnicity pay gap). Numbers have been rounded.

One male respondent aged 41-50 commented that he expects, "Fair and equal pay, no matter sex, race, colour or creed". Another male respondent, aged over 51, commented that he wants to invest in companies that are “Reducing the gender pay gap and providing opportunities for young people from disadvantaged backgrounds".

Diversity is important to our customers, 80% of women support the view that companies should have a level of diversity in their workforce that is representative of UK society, compared to 60% of men.

Additionally, 76% of the female respondents and 53% of the male respondents expect diversity on boards and in senior management teams.

3. Respondents across all age groups and genders ranked poor treatment of workforce (core business and supply chains) as the priority for voting.

Whilst all respondents feel very strongly about the treatment of workers, there is some variation between age groups and genders on other business practices.

Customers aged over 51 put excessive executive pay as their second priority, whilst customers aged 41-50 put tax avoidance. For younger customers (aged under 40), poor climate risk management is second priority.

Women put poor climate risk management second, and tax avoidance third. On the other hand, men put tax avoidance second, and poor climate risk management third.

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Total question respondents: 1504

One male respondent, aged 41-50, remarked, "It's all about good leadership. If there is exploitation of workers to make profits for the top people I don't want to be associated with those companies. The other elements will also be in place with that type of culture." One male respondent aged over 51 said that he is particularly concerned about "the use of zero-hour contracts".

One female respondent aged 30 or under commented, "Sustainability and equality are the two most important factors for me."

On the other hand, some respondents prefer to focus on profitability only. One male respondent aged 41-50 remarked, "I personally don’t care about business practices, only whether the investment will achieve a good level of return which is the only metric I’m worried about with a pension."

4. Over half of the respondents (52%) believe that fast fashion makes a negative contribution to society. This is most pronounced (82%) amongst women aged 30 and under.

One female respondent aged 30 or under remarked that she wants to invest in, “Future focused business with ethical and environmental values."

5. Most savers (76%) want some form of action on oil companies in their pensions.

Almost half (49%) want to only invest in companies that are committed to improving their impact on the environment, and 10% want to invest and use voting and selling to force change. Almost a fifth (17%) want to remove oil companies at the outset.

These views are generally consistent with the views expressed in the 2020 survey, in which 78% of respondents demanded action on oil companies. There is a slight change in attitude however, with only 10% support for engagement (invest by using voting and selling to force change), compared to 23% in 2020.

Younger savers are slightly more likely to show concern about investing in oil, with 82% of those aged 30 and under demanding action compared to 71% of those aged over 51.

Oil companies currently offer big profits which could benefit you in retirement. They also emit a lot of carbon and are accused of accelerating climate change. Should your pension invest in these? By age

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Total question respondents: 1709. Numbers have been rounded.

One female respondent aged 41-50 said, "While fossil fuel companies may be lucrative for the next 5 years caution must be taken for any further investment to oils and gas unless the company itself can prove an offset of resources and that they are working towards not just biodiversity but zero emissions from all manufacturing regimes."

One male respondent, aged 41-50, remarked, "Be more proactive in environmental investment and think of impact to others. Sure we need to make money / profit. Just need to be more mindful about impacting people and biodiversity loss." Another male customer, aged over 51 commented, "Invest in environmental sciences, green energy and fuels to combat climate change."

One female respondent aged over 51 commented, "Just to be kind, considerate and think about the planet, after all, we only have one of them - without it, no life, no money, no pension."

On the other hand, one female respondent aged under 30 commented that she wants to invest in “Whatever is likely to have the highest gains."

6. The majority of respondents (74%) feel more apprehensive about whether their pension savings will give them a comfortable retirement due to the coronavirus pandemic, and 61% report that they feel more motivated to save and build up their pension.

Women are slightly more likely to say they are apprehensive about the amount they’ve saved into their pensions, at 77%, compared to 72% of men. Women are also more likely to say they feel more motivated to save, at 66% compared to 59% of men.

Attitudes are consistent across age groups.

Please contact engagement@pensionbee.com for more information on this data.