Circa 5000 pension

Best UK sustainable pensions in 2022

Starting or switching to a sustainable pension is one of the most impactful decisions you can make to help do your bit for the climate crisis. In fact, most people don’t realise that they are investing unethically because – let’s face it – pensions are pretty boring.

Back in 2019 we produced a summary of the 4 best ethical investment platforms in the UK, but the last few years have witnessed a plethora of sustainable and ethical investment options for people living and working in the UK, and a swift exit from sustainable investing favourites Wealthsimple.

There’s never been a better time to invest your money for the future of the planet and its people. If you’re looking for a place to start, below is a summary of the best sustainable pension options for people who live and work in the UK.

Sustainable pension platforms

For those who prefer a simple, automated and hands-off approach, check out Circa5000 – by far one of the best sustainable pensions available in the UK. Formerly Tickr, Circa5000 is an app-first sustainable investment platform which gives you a simple interface and choice of sustainable investments for your pension. Circa5000 is also a certified B-corp which is no small feat, particularly in the regulated finance industry.

circa5000 sustainable pension

Structured around two core themes ‘Planet’ and ‘People’, Circa5000 offer investments delivering clean energy, safe water, sustainable food, good health and better education.

The finance industry refers to Circa5000 and other investment platforms as robo advisors because your investment options are adjusted algorithmically over time. If you’re older and skeptical, you might conclude an algorithm is ‘just a computer’ but most research points to passive investing as a better option than actively-managed human investing. No surprises there for us millennials!

Other robo advisors with sustainable pension options include the PensionBee fossil free plan, the Penfold sustainable pension plan, the Moneybox SRI portfolio, and the Wealthify ethical plan. All of these are good options for people in the UK looking to start or switch their pension to a sustainable portfolio.

DIY sustainable pension

If you understand the basic principles of investing and you know how a pension works, or perhaps you’re just looking for a more involved approach to managing your hard earned cash, a great starting point is the interactive investor ACE 40 – a comprehensive list of sustainable investment ideas allowing you to build your own portfolio based on your priorities and principles. If you’re already paying into a workplace pension or SIPP, you can open a new account with an investment platform such as ii and transfer your existing pension.

ii ACE 40 alternative investments

If the ACE 40 list of sustainable investment options is giving you decision fatigue, check out a summary of underlying investment portfolios from popular UK platforms below.

Wealthsimple SRI portfolio

Platform no longer available in the UK

iShares Core UK Gilts ETF GBP Dist
iShares Global Clean Energy ETF USD Dist GBP
iShares MSCI EM SRI ETF USD Acc GBP
iShares MSCI Europe SRI ETF EUR Acc GBP
iShares MSCI Japan SRI EURH ETF Acc GBP
iShares MSCI USA SRI ETF USD Acc GBP
Lyxor UK Govt Bd 0-5Y (DR) ETF D GBP
UBS ETF MSCI UK IMI SRI GBP A dis
UBS(Lux)FS BlmbgMSCI USLqCpSu $ Adis GBP
UBS(Lux)FS MSCI Pacific SRI USD Adis GBP

Circa5000 sustainable portfolio

iShares Global Clean Energy ETF USD Dist GBP
L&G Clean Water ETF GBP
L&G Pharma Breakthrough ETF GBP
Rize Cybersecurity Data Privacy ETF GBP
Rize Education Tch & Dgtl Lrnng ETF AUSD GBP
Rize Sustainable Future of Fd ETF A USD

Penfold sustainable portfolio

Just one – but it’s very cheap at 0.17%

MyMap 5 Select ESG D Acc

Wealthify sustainable portfolio

Actively managed portfolio

Vanguard US Government Bonds Hedged
Royal London Short Duration UK Govt Bonds
Vanguard European Government Bonds hedged
Liontrust Sustainable Future Corporate Bonds
Kames Ethical Corporate Bonds
Royal London Sustainable Future Managed Income
EdenTree Amity Short-Dated Bond Fund
Royal London Ethical Bond Fund
Rathbone Ethical Bond Fund
Royal London Sustainable Leaders Fund
Aberdeen Standard UK Ethical Fund
Liontrust Sustainable Future Global Growth Fund
Liontrust Sustainable Future European Growth Fund
Stewart Investors Sustainable Future Asia Pacific ex Japan Fund
Stewart Investors Sustainable Future Emerging Markets Fund
Stewart Investors Worldwide Sustainability Fund
Pictet Global Environment Opportunities Fund
Hermes Global Shares ESG Fund

PensionBee sustainable portfolio

As of August 2022, the underlying investment is the FTSE All-World TPI Transition ex Fossil Fuel ex Tobacco ex Controversies index currently exclusive to PensionBee in the UK.

Moneybox SRI portfolio

Royal London Emerging Markets ESG Leaders
Old Mutual World ESG Index fund
iShares Overseas Corporate Bonds ESG
iShares Global Property Equity
iShares Overseas Government Bond Index – Govt. Bonds

Sustainable SIPP asset allocation

If you’re building your own sustainable investment portfolio for a SIPP, be sure to read-up on asset allocation. Check out our simple ethical portfolio as a guide, or read through a deep-dive on Monevator or Money to the Masses for better guidance.

At the time of writing, the Money to the Masses asset allocation for its 80/20 investor club is:

UK Equities 9%
North American Equities 23%
Japanese Equities 0%
Chinese Equities 0%
European Equities 4%
Asian Pacific Emerging Equities 5%
Other International equities 8%
Global Fixed Interest 15%
UK Fixed Interest 0%
UK Gilts 3%
Alternative Investment Strategies 15%
Commodities 10%
Cash 5%
Property 3%

If all of this seems like too much hard work, just go for an all-in-one fund such as the MyMap 5 Select ESG D Acc or Legal & General Future World ESG Developed Index Class C.

Please note this is not considered financial advice.

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