UK Workplace Pensions: How Climate-Friendly Is Your Retirement Pot?
By Boring Money
24 April, 2025
Most of us don’t know where our pension is invested, but we should. With billions of pounds sitting in UK pension pots, your money could be funding climate solutions… or propping up polluters. A new report ranks 20 of the UK’s biggest workplace pension providers on their climate credentials. We break down who’s leading, who’s falling behind, and what it means for your savings. Whether you’ve got £2,000 or £200,000 in your pension, it’s time to ask: Is your money working for the future of Planet Earth, or against it?
The UK pension landscape: Who’s saving what?
The average UK worker has £49,000 tucked away in their workplace pension - but don’t be fooled by that headline number. According to Boring Money’s Pensions Report 2024[1], 61% of pension holders have less than £20,000 saved. On the other end of the scale, only 11% have managed to build a pot worth more than £100,000.
Still, pensions remain the UK’s most widely-held financial product. Three-quarters of working-age adults have at least one pension, and 65% are enrolled in a workplace scheme. So, we’re all in the same boat - just with very different-sized lifebuoys.
But here's the part most people overlook: While your pension pot grows quietly in the background, it’s also out in the world, being invested. And where it’s invested can have an impact, both on your future and on the planet.
Climate change and workplace pensions: Why it matters
Your pension isn't just a pot of money waiting for retirement; It's actively shaping the world you'll retire into. Pensions represent a significant financial force, investing vast amounts into different industries worldwide. With climate change becoming an increasingly urgent global issue, the types of businesses your pension supports matter immensely - and can make all the difference.
And this isn’t just about values. It’s about risk too. Pensions are long-term investments, often spanning several decades. This long-term horizon makes them particularly susceptible to the risks posed by climate change, such as regulatory changes, and the physical impact of the climate crisis, such as floods or droughts.
Providers that ignore it could be exposing your money to long-term losses. Those that invest in climate-conscious businesses are more likely to ride out future shocks - and grow.
If you have a pension, you have power. So much power that greening your pension reduces your carbon footprint 21x more than if you gave up flying, went veggie and switched energy provider combined.
It’s your money, and your future. So it’s worth knowing - is your pension building the kind of world you actually want to retire into?
Climate rankings: How do UK pension providers stack up?
A climate report published by Make My Money Matter in February 2024 assessed the UK’s biggest pension providers on their approach to tackling climate change.[2]
From fossil fuels to deforestation policies, the report examined how seriously our providers are taking their responsibilities in the fight against climate change.
Here's who came out on top, who’s stuck in the middle, and who needs to seriously clean up their act.
The top performers: Who’s leading on climate?
Let’s start with the good news. A handful of pension providers are taking climate risk seriously - investing in greener solutions, setting targets, and using their influence to push companies in the right direction. Here’s who’s ahead of the pack.
Mid-table mediocrity: Who’s halfway there?
Next up: the “not bad, not great” crowd. These providers aren’t ignoring the climate crisis, but they’re not exactly charging ahead either. Some show promise in certain areas - but there’s still work to be done across the board.
The laggards: Who’s falling behind?
And then there are the stragglers - providers that, based on this report, haven’t quite got the memo. Whether it’s a lack of transparency, poor target-setting, or just an overall shrug at climate impact, these firms are failing to match the urgency of the moment.
These providers may be offering you a decent pension product - but they’re miles behind on sustainability.
What’s being scored? The climate criteria that matters
So, what exactly goes into the climate-conscious scoring system? It’s not just about avoiding fossil fuels or planting the odd tree. The report broke down each provider’s climate performance across seven critical areas - covering everything from the clarity of their targets to the transparency of their reporting, and how actively they push companies to clean up their act.
This isn’t fluffy marketing or vague green promises. These are hard measures of real-world action, and they paint a clearer picture of how seriously a pension provider is taking its climate responsibilities.
Here’s what the report looked at:
Together, these categories help give a comprehensive view of whether your pension provider is helping or hindering progress on climate change.
Common climate failings across the board
Even the top scorers aren’t immune to criticism. In fact, one of the biggest takeaways from the report is just how far the entire industry still has to go.
While some providers are ahead of the curve, there are a few key areas where nearly all of them are falling short - and the consequences matter, not just for the planet, but for your long-term returns. Climate change isn't just an environmental issue; it's a financial risk too.
Here are the three biggest red flags flagged by the report:
How to make your pension more sustainable
If you're one of the 65% of UK adults with a workplace pension, these climate-conscious rankings don't just have to be interesting reading - they could be a wake-up call.
The provider your employer has chosen might be growing your savings, yes, but it could also be investing in companies pumping out greenhouse gases, wiping out rainforest, and contributing to the acceleration of climate change.
The truth is, you’re not actually powerless. You can take steps to align your pension with your values, and it’s not as difficult or awkward as you might think. Here's what you can do.
Step 1: Talk to your employer
If your workplace pension provider scored poorly in the climate rankings, you’re well within your rights to raise the issue. Most employers won’t have picked a provider based on its climate-friendly credentials; They likely went with a default option, or the one offering the simplest setup.
But here's the thing: employers can switch pension providers. And many are starting to consider sustainability when reviewing their schemes. All it takes is a nudge from staff to start the conversation.
Try this:
Ask your HR department or pension contact who the current provider is and whether employees have fund choices.
Share your concerns, backed up with facts (like their climate score).
Ask whether they’d consider reviewing the provider, or at least offering access to more sustainable fund options.
It’s especially effective if multiple employees speak up, so find your workplace’s green warriors and team up.
Step 2: Explore your fund options
Even if you can’t change your provider, you might be able to switch your default fund. Most workplace pension schemes offer a range of investment options, including ethical or sustainable funds - but you may have to dig around the online portal to find them.
If you’re unsure, ask your pension scheme’s customer service team for:
A list of available funds
ESG, climate-friendly or sustainability-focused options
Guidance on switching funds online or over the phone
It’s often as easy as clicking a few buttons and can make a big difference over the long term.
Step 3: Open a SIPP for more control
If your workplace pension is limited or your employer’s not budging, you’ve got another option: open a self-invested personal pension (SIPP).
A SIPP gives you the freedom to pick your own investments - including climate-friendly funds, climate change-themed ETFs, or even green bonds. You can invest in line with your values and your appetite for risk. Plus, SIPPs come with the same tax perks as regular pensions!
A SIPP doesn’t have to replace your workplace pension. Many people run both side by side. One for the boost from employer contributions, the other for ethical impact and more control.
Your pension might be one of the biggest investments you ever make and it’s working away in the background, whether you’re paying attention or not. But a little digging, a few questions, or a smart switch could mean your retirement savings are not just growing - they’re doing good, too.
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