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Green Pensions

Comment 19th July 2010

Instead of buying an annuity with a pension fund, there should be an option to invest the fund in generating green energy, e.g. buying shares in a wind farm. The income for the pensioner would then be a share of the value of the electricity sold.

Monthly fluctuations in income would be ironed out if several wind and wave (or other) farms were invested in throughout the UK, as when it is calm in Cornwall it may well be windy in Orkney. The income could also be smoothed by holding some back in the windier months and paying more in calmer months (or buy the company buying insurance against particularly calm weather).

This could be extended to allow pension contributions to go straight into a green generation investment during a person's working life. Any income from these investments would be re-invested up to the moment the investor reached retirement age and decided to retire and draw an income.

Why does this matter?

Such a scheme would benefit the country as a whole, by increasing the capital invested in green electricity generation (with a potentially massive increase if a large proportion of the working population took it up).

As the cost of electricity looks to increase in future years, this would also give a potentially greater return on pension investements.

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