According to a poll by responsible investment organisations ShareAction, Make My Money Matter and Finance Innovation Lab, 77% of people believe the government should do more to ensure pension holders have additional retirement savings, while 65% think ministers should encourage pension funds to tackle climate change.

The organisations unveiled a five-point plan, Better pensions for all and a sustainable, productive economy: Proposals for reform, which they said would prevent the UK from “sleepwalking” into a pensions crisis. It includes increasing the mandatory minimum level of pension savings to 12% or more, with a 5% contribution from the employee and 7% from the employer, and the government ensuring that default pension options focus on long-term investments.

Another suggestion was for ministers to help pension funds drive green investment by expanding institutions such as the UK Infrastructure Bank and developing initiatives that boost take-up of new technologies and aggregate “fragmented opportunities”. It also called for pension funds to phase out fossil fuel investments via science-based 1.5°C aligned transition plans, carry out mandatory due diligence on deforestation, and help trustees better integrate climate and nature risks.”

While UK pension funds are “major investors”, the system is in a “shocking state”, said Finance Innovation Lab chief executive Jesse Griffiths. “People are right to be worried that their retirements will be ruined by climate change and inadequate pension savings.

“It’s time for the government to act and adopt a bold but sensible reform agenda that can make the pensions system work for savers, the environment and the economy.”

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