Social investment fund is most popular default

More than three-quarters (77%) of respondents would prefer to contribute to a social investment fund rather than a conventional fund when selecting the default fund for a defined contribution (DC) pension scheme, according to research by Standard Life Investments.

Its research, Identifying new ways to engage with savers in defined contribution pensions, which had 1,000 respondents, was commissioned by the Defined Contribution Investment Forum (DCIF).

The research found nearly half (44%) of respondents would choose sustainable or environmental funds, 33% would choose a fund that invests in infrastructure, and 23% would choose a fund that invests in local businesses.

Andrew Dickson, chairman at the DCIF and investment director at Standard Life Investments, said: “The importance of ensuring that the pensions industry delivers appropriate and relevant investment [options] to meet the evolving needs of DC members is a natural topic for the DC Investment Forum to consider.

“This research has identified an interest from large groups of future DC pension savers in what type of investments they’re making with their retirement savings, rather than just achieving investment returns derived from conventional approaches.

“These findings present an opportunity for the pensions industry to engage with members on the design of their DC pension investments and restore greater trust in pension savings.”