Are there any truly ethical investment schemes out there, asks Tom Hodgkinson

For many years, I believed that I was too cool to have a pension. Thinking about the future was something for the squares. Hip cats like me lived in the moment and trusted to providence to provide. After all, didn’t Jesus say: “Look at the birds of the air, for they neither sow nor reap nor gather into barns; yet your heavenly Father feeds them. Are you not of more value than they?”

However about ten years ago I was forced to change my position when we relaunched the Idler. Due to the way we were advised to set things up by our accountant, I would be paid by PAYE and that meant that both tax and pension contributions would be taken off at source.

For the idle, PAYE certainly has its advantages. The horrifying annual submission of accounts to HMRC more or less vanishes, and there are no massive tax shocks. Too often as a freelancer I had to pay the tax of a good year with the proceeds of a bad year.

And maybe putting money into a pension would be a good thing. I saw it as a savings account, something else I had never managed to think about. We signed up with Nest pensions, the default for small businesses.

But a few months ago Victoria and I started wondering where this money was going. Where was it invested? Well, I looked it up and it seems that my paltry savings are gathered into 292 corporate barns. I had a look at the list and didn’t really like what I was seeing. There was Alphabet, Meta, Microsoft, Palantir, Shell, Uber, Spotify, Amazon, Tesla, McDonald’s and various other corporations of the type I habitually rail against.

A lot of these places are run by Trump-supporting amoral overlords of the Peter Thiel stamp. I read yesterday that Sergey Brin of Google is now MAGA.

These are the last people I want to support by buying their shares, however well they “perform”. And if I get an income from them later in life, that means I’ll be benefiting financially from activities of which I heartily disapprove of.

Surely a UK pension fund should be avoiding the US and concentrating on nice British companies like Greggs, Marks and Spencer and Tunnock’s, who make those fantastic caramel wafers?

And why do pension funds have to invest in the stock market at all? Are there no other forms of investment? Are we only allowed to gather into barns that are owned by the most amoral and greedy tyrants of all time?

We’ve asked an adviser to look at alternatives, to find some system which might allow us to have some control over where our hard-earned pennies end up, in other words, to choose our own barns.

And if readers have any advice on this thorny issue, please write back.

SELECTED COMMENTS

These comments were mailed to us after an earlier version of this piece was sent out as a newsletter. We like to publish a selection and reserve the right to edit them for clarity. Please add your thoughts in the box below.

Sir: You need a SIPP – Self Invested Personal Pension. Then you can invest in whatever you want to invest in (within reason as there are rules as to what can be put inside it – for one, your house can’t be) – the only downside is that you then have to pay attention and run it yourself.
Courtney

Sir: Get your SIPP’s set up Tom and get Idler inc to including it in your pension solution, don’t allow Babylon to misallocate your funds, especially as the ‘big 7’ can never make enough money to repay their debts so the inevitable wipe out will happen there. And park a chunk of pension money in Icelandic bonds – Babylon is still fuming that they dared to jail their bankers back in the great financial swindle, so they are very underpriced and the basic foundations of the State are sound, unlike Blighty alas.
Mr Jones

Sir: A good accurate letter. My own position on the investment of pension and other fiscal levies is through a Commons Capital Fund governed by a democratically elected board with a mandate to make investments only in ecological and socially progressive firms or activities. As it happens, this is very close to what is done by the Norwegian pension fund. Go well.
Guy

Sir: I invest my pension ethically myself. It’s pretty common and very easy. Nest and similar providers also have comparatively high fees, so doing it yourself means it grows a little faster too as you don’t pay such a high % every year. You can do a one-off appointment with a financial advisor (I am not one!) and set up a SIPP (self-invested pension). It’s treated the same by the govt (so you still get the tax incentives etc that you would with Nest etc). Mine is done through ii.co.uk and I can manage the whole thing from my phone. I even transferred an old pension I had into them, which took less than half an hour of admin. Super easy. In there, YOU choose what to put money into (or not) – I invest in a lot of clean energy companies and there are even index funds specifically that aggregate solar companies (so you spread the risk across the whole of that industry rather than buying individual shares in individual companies). You can also buy index funds that are only from the FTSE-100, or invested in emerging markets etc, if you want to avoid the big American tech companies. Not financial advice, but hope it helps!
Graham

Sir: I suggest you put your pension in a SIPP. Then you choose what your pension money is invested in, not your advisor or pension provider. Best
Stuart

Sir: It’s simple really, open a SIPP and invest your money yourself, using the DRIP (dividend reinvestment plan) method. Rob West’s book, The Child Millionaire, taught me all I need to know, and I’ve used its lessons for my kids’ junior stocks and shares ISAs, my and my wife’s stocks and shares ISAs, and my SIPP. It’s way simpler than most people think and takes very little time. Rob is also a total legend – I have a feeling he contributed to the Idler years ago, although I may be misremembering that conversation! He’s big on the sustainability scene and built his own house. Cheers.
Dan

Sir: Many moons ago, I was a fully licensed Financial Adviser, and whilst not one any longer I still retain a core knowledge. As an investor into a pension fund of your own, you are fully entitled to choose where the money is invested into. From what you have written I would suggest you consider looking into some ‘Ethical Investment Funds’, of which there are many. These funds aim to do all the things other funds do, such as grow and make a good return on your investment, but at the same time they rule themsleves via well publicised ethical standards and only invest according to these rules. So, without I would think too much trouble on your part, you should be able to quite swiftly swap your existing funds for funds that are, quite literally, classified as ‘Ethical’ funds. Without going into too much detail and of course I cannot offer you specific personal ‘advice’, I would also suggest that when moving towards these ethical Funds, it would also be prudent to ensure you still have what is known as good diversification, or in other words invest in a range of countries and industries – do not put all your eggs into ‘one basket’ – even if it is an ethical basket! Happy (ethical) investing!
Adam

Sir: Buy gold and silver bullion.
Catherine

Sir: This is, no doubt, a tricky situation. In what may seem reducto absurdum, I have respirations and therefore give off CO2, which is bad for the planet.  But I’m not about to willingly give up respirations.  Nor am I willing to give up an occasional tasty hamburger because cows fart methane. In these modern times, it is nearly impossible to get by without a phone.  While I know little about the corporate philosophy of Android, I do know that Apple seems to be less prone to problems so I choose Apple.  My point is that it is impossible to exclude every maleficent force in the world.  My retirement finances are in the hands of professionals who manage it well and assure me of a comfy retirement.  I have, in my career, seen far too many people who have no such cushioning and in their old age live hand to mouth.  I strongly embrace the ideals of The Idler and at 62 work only 2 days a week at a vocation I enjoy and spend the rest of my time creating art, playing music and generally enjoying life.  But, unfortunately, this does require some money.  One would have to look long and hard to find a squeaky clean company, much less build a retirement portfolio based on such companies.  I own no individual stocks of any kind but am not going to exclude funds that may participate in some of these, seemingly, dastardly companies.  In short, I try to live a virtuous life of eudaimonia.  I’m sure I inadvertently step on the occasional bug and perhaps indirectly invest in bad businesses. But a fellow can only do so much.  Tyrants like Trump are generally relatively short lived.  Do what you can. Sincerely,
Dan

Sir: Thanks for this piece. I agree with it in principle but there’s a problem. What does eg M&S do with its spare cash or other assets or reserves not immediately deployed in the business? Chances are it buys shares in these hideous companies you hate or else puts its funds into a collective which holds some of the hated shares or into a collective which invests in other collectives which themselves hold hated shares. Where do you start and stop? Kind regards and thanks as always for your thought provoking pieces and great magazine.
Donald

Sir: I also set up a NEST pension when it was launched and I had the option to invest only in ethical companies so I chose that. I’m sure you can change it. Any other dribs and drabs of money we have are invested ethically through our financial advisor – he totally understands and we are massively relieved to not have to think of the whole boring business ourselves.
Sally

Sir: In Orstralya, where I abide there is a pension (called superannuation here) fund called ‘Ethical Investments’ who avoid fossil fuel, mining etc although quite possibly some of the swine you mentioned. Other than that, can you create your own pension fund?
Peter

Subscribers may comment. Please add your idle thoughts using the box below

Subscribe to the Idler here and get 17% off the shop price plus a FREE copy of Idle Thoughts by Tom Hodgkinson, worth £8.95.

A Drink with the Idler

Next week’s guest on “A Drink with the Idler” is Professor Daisy Fancourt, who will be chatting to Tom Hodgkinson about how creating and consuming art makes us happier and can even help us live longer.

Mark Vernon will also present a new Thought for the Week.

That’s Thursday 7 May, 6pm-7pm.

Find out more and book tickets here. It’s FREE to subscribers – otherwise £7.50.

How to Live Like a Stoic

The May/June 2026 issue of the Idler (#109) is available in Waitrose, Smiths and TG Jones.

Click here for your nearest stockist.