Can You Switch Your Workplace Pension to a Sustainable Fund?
If you have a workplace pension, there’s a good chance you’ve never really looked at what it’s invested in. For most people, contributions are set up automatically, money goes out of your payslip, and that’s where the thinking stops.
But as awareness around climate change, social issues, and corporate responsibility grows, more people are starting to ask an important question: can I switch my workplace pension to something more sustainable?
The short answer is yes, often you can, but how easy it is, and what your options look like, depends on how your pension is set up. This guide walks you through what’s possible, what to watch out for, and what to do if your choices feel limited.
In short: can you switch to a sustainable workplace pension?
In most UK workplace pensions, you can switch the funds your money is invested in without changing your employer or affecting their contributions. Many providers now offer ethical, ESG, or sustainable fund options, although the quality and transparency of these can vary.
What you usually can’t do is switch the pension provider itself, that decision sits with your employer. That said, even small fund changes can significantly shift where your money is going.
What does “switching” actually mean?
One of the biggest sources of confusion is the word switch.
In most cases, switching your workplace pension does not mean:
Moving your pension to a new company
Losing employer contributions
Closing your existing pension
Instead, it usually means changing the investment fund your pension contributions are allocated to within the same provider.
Most workplace pensions have:
A default fund (where your money goes automatically)
A small range of alternative funds you can choose from
Sustainable or ethical options, if available, will usually sit within this fund range.
Step 1: Find out who your pension provider is
If you’re not sure who manages your workplace pension, start with:
Your payslip
Your HR portal
Your employment contract
Or ask HR directly
Common UK providers include Nest, Aviva, Legal & General, Scottish Widows, Standard Life, and NOW: Pensions.
Once you know the provider, log in to your pension account or set one up if you haven’t already.
Step 2: See what fund you’re currently invested in
Most people are automatically placed into a default fund. These are designed to suit the “average” saver, not your personal values.
Inside your pension portal, look for:
“Investments”
“Funds”
“Where your money is invested”
Take note of:
The fund name
Any description of its strategy
Whether it mentions ESG, climate, or ethical considerations
If it’s unclear, you’re entitled to ask your provider for a breakdown of the fund’s holdings.
Step 3: Check if sustainable fund options are available
Many providers now offer at least one fund described as:
Sustainable
Ethical
ESG
Responsible
Climate-focused
However, labels don’t always tell the full story. Some funds make exclusions (like tobacco or weapons), others actively invest in solutions (like renewable energy), and some simply rank companies against peers.
This is where it helps to understand the different types of sustainable investments, as not all approaches will align with your values in the same way.
If your provider offers multiple options, read the fund factsheets carefully before switching.
Step 4: Understand what you can’t change
It’s important to set realistic expectations.
In most workplace pensions:
You can choose from the funds your employer has made available
You can’t add external funds
You can’t usually change provider while employed
You can’t direct individual stock choices
This can feel restrictive, but remember: even one fund switch can redirect your money away from industries you’re uncomfortable with.
What if there isn’t a sustainable option?
This is more common than it should be, especially in older pension schemes.
If you don’t see any ethical or sustainable funds:
Ask your provider directly if any ESG-aligned options exist
Ask HR whether sustainable funds can be added to the scheme
Document the response
Employers are increasingly aware that employees care about how pensions are invested. While change won’t happen overnight, requests do get logged, and sometimes acted on.
Will switching affect my returns?
This is one of the biggest concerns people have, and understandably so.
The idea that sustainable investments automatically underperform is outdated. While no investment is risk-free, many sustainable funds are broadly diversified and designed for long-term growth, just like traditional funds.
What matters more than the label is:
How diversified the fund is
Its underlying strategy
Your time horizon
If you want to go deeper on this, it’s worth reading about the pros and cons of sustainable investing to get a balanced view.
How to actually switch funds (practically)
Once you’ve chosen a fund:
Log in to your pension portal
Find “Change investments” or similar
Select the new fund
Confirm whether the switch applies to existing money, future contributions, or both
Most switches take a few working days and don’t require any paperwork.
Watch out for greenwashing
Not every fund marketed as “sustainable” deserves the label.
Some funds:
Still invest in fossil fuel companies
Rely heavily on vague ESG scoring
Make minimal exclusions but market heavily
That doesn’t mean they’re useless, but it does mean you should be cautious. Understanding greenwashing in investing can help you spot when a fund’s marketing doesn’t match its reality.
A note on control and expectations
Your workplace pension is unlikely to ever reflect your values perfectly. The goal isn’t purity, it’s direction.
Switching to a more sustainable fund:
Improves alignment over time
Signals demand for better options
Helps you feel more connected to where your money goes
Small changes compound over decades.
Conclusion
So, can you switch your workplace pension to a sustainable fund? In many cases, yes, and it’s often easier than people expect. While options can be limited, taking the time to understand your current investments and make informed changes is a meaningful first step.
You don’t need to overhaul everything at once. Even a single fund switch can move your pension closer to reflecting the kind of future you want your money to support.