If you have already read the guide to ethical investing in a UK ISA, you have done something most people never get round to. You have looked at what your ISA actually holds, and made a considered choice about it. Well done.
Now here is the uncomfortable follow-up question. What is your pension invested in?
For most people, the honest answer is: no idea. And that matters more than it sounds like it should, because for most people the pension is not the smaller pot sitting quietly alongside the ISA. It is the bigger one, often by a very wide margin. Someone with fifteen thousand pounds carefully invested in a hand-picked ethical ISA might easily have a hundred and eighty thousand pounds sitting in a workplace pension default fund they have never once looked at. All of that careful values-based decision making, applied to the smaller pot, while the much larger pot sits in whatever fund was chosen for them on their first day at work.
This is not a criticism. It is simply what happens when a decision is made for you automatically, in the background, at a moment when you were thinking about far more pressing things than fund selection. This piece is the practical follow-up. It covers the two routes available to you, a workplace pension or a SIPP, and what to actually do in each case.
(For the basics of how a pension works as a wrapper, and how tax relief actually reaches your pot, how UK pensions actually work covers the ground this piece builds on.)
Why the pension gets ignored
There are good reasons this happens, and none of them reflect badly on you.
Pensions feel locked away and abstract in a way an ISA does not. You cannot touch the money for decades, so it is easy to file the whole subject under “later” and move on. Most employees never actually choose their pension fund in the first place. Auto-enrolment places you into a default fund automatically, and unless you go looking, you may never learn its name, let alone what it holds. Workplace pension portals also tend to be clunkier and less inviting than the slick apps of the big ISA platforms, which does nothing to encourage a closer look.
The result is that most people revisit their ISA choices periodically and never revisit their pension fund at all.
It is worth restating the core idea from the pensions pillar here, because it applies with equal force to the ethical question. A pension is a wrapper, not a product. The tax treatment is fixed by the government. What is actually inside the wrapper, which companies you own a slice of, is a separate decision entirely, and one that is almost always yours to make if you choose to.
Check what you’re actually invested in first
Before deciding what to change, find out what you currently hold. This takes about five minutes.
Log in to your pension provider’s portal, or dig out your most recent annual statement. Find the name of the fund or funds you are invested in. It will usually be something like a “default growth fund” or a named lifestyle fund, and the name alone tells you almost nothing.
Search for that fund name online, usually alongside the provider’s name, and look up its factsheet. Every fund is required to publish one, and it will show you two things worth checking. First, the top ten holdings, which will tell you at a glance whether the fund contains the kinds of companies you would rather avoid. Second, the sector breakdown, which shows you the overall shape of what you own.
This is the same evaluation approach set out on the greenwashing post: look at what a fund actually holds rather than what its name or marketing implies. A fund with “sustainable” in the title that still holds a handful of major oil companies in its top ten is not necessarily lying to you, some funds take a best-in-class approach within contested sectors, but you should know what you own before deciding whether that is acceptable to you.
Route one: workplace pensions
If you are employed, this is very likely where the bulk of your pension money sits, and it is worth understanding both what is possible and what its limits are.
The encouraging news is that many large workplace pension providers, including names like Nest, Aviva, Scottish Widows, Legal & General and Aegon, now offer at least one ethical or sustainable fund option alongside their conventional default. Switching, where the option exists, is usually a matter of logging into the portal and selecting a different fund from a dropdown list. It typically takes a few minutes and does not require you to do anything else differently.
If your scheme does not currently offer an ethical option, the next step is simply to ask. Contact HR or the scheme administrator and raise it directly. This is a more effective route than it might sound. The Pensions Regulator actively encourages workplace schemes to widen their fund choices, and requests from employees are part of what drives providers to add new options over time. You may not be the only person who has wondered about this, and asking costs nothing.
It is worth setting expectations honestly here. A workplace scheme will typically offer one or two ethical alternatives rather than the wide menu of funds available through a SIPP. You are choosing between a small number of options rather than building something bespoke. For most people, this is entirely sufficient. A single well-constructed ethical fund, chosen deliberately, is a considerable improvement on a default fund with no ethical screen at all, even if it is not a perfect match for every value you hold.
Route two: the SIPP
If you have a Self-Invested Personal Pension, whether because you are self-employed or because you have consolidated old workplace pots into one, you have considerably more freedom.
A SIPP applies the same fund selection logic as an ISA, because the wrapper itself places no restriction on what you can hold inside it. The tax treatment is different, but the investment menu is not. This means the fund categories covered in the ethical investing in a UK ISA post, ethical index trackers, more heavily screened ESG funds, and thematic funds, apply here in exactly the same way. There is no need to relearn the landscape. The same evaluation questions, what does the fund hold, which index does it track, what does it cost, apply equally to a SIPP.
There is one meaningful difference worth flagging. Pension money typically cannot be touched for decades, often longer than most ISA money is left untouched. That longer horizon makes a broad, low-cost ethical tracker a more natural core holding than a concentrated thematic fund betting on a single sector. Thematic funds can be a reasonable small addition to a portfolio with this much time to run, but they are a poor substitute for a broad ethical tracker as the main holding, for exactly the same reasons set out in the main ethical investing guide.
The one thing that’s different about pension money
A few points are worth understanding specifically because this is pension money rather than ISA money.
Tax relief arrives regardless of which fund you choose. Switching from a conventional default fund to an ethical alternative does not affect the tax relief on your contributions in any way. There is no trade-off here between the tax benefit and the ethical choice, in the same way there is no reliable trade-off between ethical investing and returns more broadly, a subject covered properly in the honest performance question.
Because pension pots are typically larger and held for longer than ISA pots, charges matter even more here than they do in an ISA. A difference of half a percent in annual fees, compounded over thirty years on a six figure pension pot, is a considerably larger sum than the same percentage difference on a smaller ISA held for a shorter period. Check the ongoing charges figure on any ethical fund you are considering with particular care, and treat anything noticeably above the range typically seen for ethical trackers as something that needs justifying.
It is also worth addressing a worry that sits unspoken behind this whole subject for a lot of people. Switching your own fund choice does not reduce or affect your employer’s contribution or any matching arrangement in place. The employer match is based on your contribution rate, not on which fund you have chosen to hold the money in. Changing the fund changes nothing about the money going in, only about what it is invested in once it arrives.
A realistic starting point
You do not need to solve this in one sitting. Three steps, done in order, get you most of the way there.
Find your pension statement or log in to the portal this week. Not eventually. This week.
Look up what the current fund actually holds, using the factsheet approach described above. Five minutes, no more.
Check what ethical alternative is offered. If one exists, consider switching. If none exists, ask the question of your scheme administrator or HR, and note that asking is itself a useful and reasonable thing to do.
The pot that actually matters
The ISA is usually the smaller pot, and for many people it is also the easier decision, because ISA platforms make fund switching simple and the sums involved feel more manageable. The pension is usually the bigger pot, and it is the one almost everyone leaves alone.
Fixing that imbalance is not a complicated project. It is a single afternoon of looking something up, understanding it, and making one decision, or asking one question if the decision is not yet available to you. Given how much larger the pension pot usually is, and how much longer it typically has to grow, that afternoon’s work is likely to matter more to the eventual shape of your portfolio than almost any other single choice you make about ethical investing.
You have already done the harder part by thinking this through for your ISA. The pension is the same question, applied to the bigger number.
Important: this is not financial advice. Everything on this site is for information and education only. Nothing here constitutes regulated financial advice. Investing involves risk and your money can go down as well as up. Always consider your own circumstances, and if you need personalised advice, speak to a qualified financial adviser.