Climate change is a top priority issue for 'Generation DC'

New research by asset manager Franklin Templeton suggests that addressing their emotions and ethical concerns could be the key to encouraging millennials to invest more in their pensions.

The report, in conjunction with research company Adoreboard, is focused on the first cohort of people that will rely heavily on their DC pension savings in retirement. ‘Generation DC’ as it is referred to, is made up of millennials, currently aged between 22 and 38.

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45% said they would pay more into their pension plans if these incorporated responsible investment strategies

Of the 2,700 UK employees that participated, a surprisingly high proportion (45%) said they would pay more into their pension plans if these incorporated responsible investment strategies; 70% of these said they would contribute 1% to 3% extra, while 14% would add an extra 4% to 5% of salary to their pension every year.

However, only 22% of Generation DC felt their current pension reflected their values. This highlights the disparity between what Generation DC employees want from their pension scheme and what is currently on offer. 51% of respondents said they believe responsible investment values should be built into the default investment strategies in which most DC savers are invested.

workplace-quotemarks-topOnly 22% of Generation DC felt their current pension reflected their values

Generation DC ranked responsible investment second in importance in a list of attributes for their pension plan – ahead of fees and investment choice – with only the level of their employer’s contribution seen as more important. Climate change was the issue about which savers felt most strongly, motivating 55% of respondents. Animal welfare and excess plastic completed the top three concerns.

The full report is available here.

Employers and trustees who would like to explore any ethical or environmental, social and governance (ESG) options can contact their PS Aspire consultant for further information.

Posted by Christine Wilson

Topics: Employee Engagement, Workplace Savings

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