HALF OF PENSION SAVERS SHOW PREFERENCE FOR UK INVESTMENT

When asked about their investment preferences, 37% said they would prefer UK investments if they generate comparable returns and a further 16% would prioritise UK investments even if they provided lower returns.

The research highlights a key principle for pension funds and policymakers: UK investment should be pursued when it directly benefits savers and their future retirement income.

Despite the focus on domestic investments, 63% of savers do not know whether their pensions are invested in UK businesses or infrastructure projects. Only 13% are certain that their pension includes UK investments, and 24% believe it does but are unsure.

Despite pensions being one of the most significant financial assets for UK workers, many lack knowledge about their investments. A total of 74% were aware that pension schemes invest their money, but only 23% of DC savers and 25% of DB savers knew where their pensions were invested. Just over a third (37%) of DC savers believe they have the skills and knowledge to choose their pension investments, while a similar proportion (37%) say they do not.

To address this, pension providers and the Government must improve financial literacy, ensuring savers understand their investment options and can make informed decisions.

While climate change is also a concern for many savers (70% are worried about its impact), their investment preferences remain mixed. Only 19% of defined contribution (DC) savers would definitely accept lower returns for greener investments. A further 50% said they might consider lower returns, but only if the impact was significant and 31% prioritise financial returns.

Although environmental and ethical factors matter to pension scheme members, these findings show that financial performance needs to remain a part of the investment decisions.

Zoe Alexander, Director of Policy and Advocacy at the Pensions and Lifetime Savings Association, said; "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.”

ENDS

Consumer Research: Independent research carried out online by Yonder consulting with a nationally representative sample of 2,071 UK adults aged 18+ between 3rd-4th March 2025, (of which of which 603 have a DC workplace pension).

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]