Cash conscious UK millennials would be prepared to pay an additional £12bn into their pension funds over the next decade if they believed the money was going to be invested in schemes which aligned with their values, new research reveals.

Responses by almost half of 2,500 workers who were analysed as part of a study are holding back on making extra contributions because of their doubts.

Many expressed grief and disgust towards companies which they claimed had poor and irresponsible investment practices, according to Adoreboard, the Queen’s University, Belfast based technology firm which measures human emotions.

Research uncovered a wide disconnect between how millennials feel about their pensions and what schemes currently deliver, the study claimed. Only a fifth felt they were aligned with their values.

Almost half of the respondents (45%) would be willing to make additional contributions if they believed responsible investments were incorporated in pension funds.

More than half (51%) believed responsible investing should be built into the default investment fund.

Of those willing to make additional contributions, the research claimed over two thirds (70%) would contribute an extra 1%-3% of their monthly salary, while 14% would pay an extra 4%-5% – the equivalent of up to £1.2bn a year.

Chris Johnston, Adoreboard chief executive, said the findings clearly showed an “emotional experience gap” between what is offered and the expectation of millennial workers.

This he said, could have wider implications for employee experience in UK workplaces.

Mr Johnston added: “Young people are more conscious, not only about their financial future, but also societal issues such as climate change.

“When reflecting on the link between companies and their values, people expressed high-intensity emotions such as trust towards companies that take responsible investment seriously.

“Fundamentally, a better understanding of how employees feel can have significant business implications and in this case, billions potentially added to the future financial wellbeing of UK workers.”

Pensions expert David Whitehair, Director of DC at Franklin Templeton Investments said: “This research shows that our industry needs to stop seeing savers as statistics and better understand them as people.

“Through better aligning themselves with the issues that workers are passionate about, schemes can help drive engagement and ultimately look to boost contribution rates.”


Want to see further results from the research with Franklin Templeton? You can download the full research report below.