Nobody wants to reach old age with no money – but why save for retirement if you can’t take the grandkids to the beach or to the mountains due to the effects of catastrophic climate change?!
OK – so that predicted reality might be a bit of an overstatement for our generation, but in the first of our POW UK Unlikely Saviours of Snow series, we’re introducing you to something that can make a huge difference to the future of our planet: your pension. Could something so dry, so dull and so desperately un-interesting actually be really cool and act on your behalf to shape the future world you want to live in – as well as provide you with some cash once you stop working?
Before all that, let’s have a quick UK pensions primer. There’s a lot of old waffle and financial jargon roped into the pensions sphere, but thinking of it in a few simple bullet points (which we’ve outlined below) can really help. If watching videos is more your thing, then this short animation from our friends at Aviva explains it all rather well we think.
A QUICK UK PENSIONS PRIMER
- You (or your employer) puts some money into a piggybank for you, which is generally part of your pay. There are different types of piggybank, but it all boils down to putting money in now to have some cash in the future when you are working less.
- Investment consultants come up with a plan on what best to do with all this money in everyone’s combined piggybank. This plan is known as the investment strategy.
- The investment consultants then go looking for clever people to implement the strategy. These people are known as investment managers – they tend to get large bonuses and are really good at doing what they are told by the consultants.
IMPORTANT POINT 1: If you or the consultants don’t tell the managers to think long term and invest sustainably, then the managers may not be particularly motivated to think long term and invest sustainably.
- The investment managers then go and invest the money. What this means is that they take your savings and use them to buy a range of investments, including shares in large companies such as Tesla, Exxon, Shell, BP, General Motors etc.
IMPORTANT POINT 2: Although the money is being invested on your behalf, you don’t technically own the shares – the managers do. That means they get to engage with the companies they are investing into on your behalf – they even vote at the company’s annual general meetings (AGMs).
- So, later on in life, you get the piggybank money back. Hopefully some of the investment returns that have happened in the meantime have been good – enabling you to retire, buy the ski chalet or do whatever it is you’ve always dreamed of doing.
NOW I KIND OF GET PENSIONS – BUT SO WHAT?
The companies (that’s the Teslas, Exxons, Apples etc of the world), of course, do what companies do and try to make profits – but they do it in many different ways. Some of them are very supportive of bypassing fossil fuels and are rapidly moving towards 100% renewable energy. Others are pretty dismissive of the planet’s well-being and are happy to exploit it to benefit their businesses.
It’s simple: the more companies that care about sustainability and renewable energy options, the better – and the more pressure that larger companies receive from the public to operate responsibly, the better our future world (when you break into that piggybank) will be. It goes without saying, but if these companies tuck into fossil fuels for the next 20 years like they’re going out of fashion, then we can say au revoir to those lovely visits to the Alps that us Brits so enjoy. Not cool!
So here’s the thing – we think your pension should invest long term for a sustainable future. In fact, we see your pension as a way to actively challenge those mischievous corporate rascals who aren’t joining in with the rest of the world to avoid climate change.
Words by POW UK Founder Sandy Trust
If you’d like to find out more about your pension as an unlikely saviour of snow (including what difficult questions you should ask your pension provider) we’re delighted to be partnering with Shareaction on this POW UK Black Mountain Run point. Connect with your pension provider to start applying the pressure – it’s a brilliant (and high-tier) way to support the cause behind POW UK and start making a difference.