*This post has been sponsored by Purposeful Money but all views are from The Green Shopper*
Would you lend a few quid to an arms manufacturer? How about a casino or a pornography producer? Perhaps you’d prefer to finance a new nuclear power station?
It’s easy not to think about where your money actually is when it’s ‘in the bank’. I’d like to imagine that my cash is kept locked in a vault, perhaps even converted into a tiny stack of gold bars, safely guarded by numerous locks. But of course the truth is a bit different. Banks are businesses, and they invest their customers money to get the maximum return through trading funds which buy and sell stocks and shares.
If your bank or pension provider doesn’t advertise its ethical credentials, the chances are that your savings may be currently funding one of the above businesses.
With many high street bank branches closing, more of us than ever are banking online, which gives us a greater choice of where to put our savings. But truly ethical options are pretty scarce when it comes to banking.
The Co-operative Bank were the first to provide an ethical banking option in the UK, and have a strong customer-led Ethical Policy. I used the Co-operative Bank for many years and found their customer service to be consistantly brilliant. It’s always easy to get through on the phone, and their staff are always friendly and helpful. According to Don’t Bank on The Bomb they are the only UK-based bank who don’t invest in any nuclear weapons or associated companies.
This honour is also shared by Triodos, which is based in the Netherlands but have their UK headquarters in Bristol. They have the highest Ethical Consumer rating for their current account, and also offer a range of savings accounts and ISAs. I love their commitment to sustainability and their policy of transparency (you can use their website to check exactly who they lend to).
If you’ve already switched your current account and savings accounts to ethical providers, there may yet be something you can do to ensure you’re not accidentally financing businesses that conflict with your own ethical values: If you’ve got a pension pot from a previous employer, the chances are you don’t know who it’s with and how it’s invested, which is where an independent financial adviser such as Purposeful Money could help you.
Due to the nature of most investment funds, the world of pensions is still sadly lacking in ethical options. The combined value of UK pensions is approximately £2000 billion, a vast amount of money which could and should be ‘better’ invested. However, Purposeful Money (P.M) offer a huge step in the right direction by screening the funds that your pension pot is invested in for a variety of ethical issues, based on criteria which you select. It’s free to get an initial check-up, in which P.M will see which issues you care about, and check how they fit with your pension provider’s ethics. If what they find is not aligned with your ethics then P.M can arrange for your pension, investment ISA or saving plan to be moved into their care. The fees they charge can even be taken from the scheme rather than paid up front.
Purposeful.Money say “Our portfolios are not the ‘perfect solution’ from an ethical point of view, as everybody’s definition and understanding of ethics is different. But we’re confident that ‘pound for pound’ your money will do more good with us than in any of the mainstream or standard funds, without sacrificing growth or exposing you to more risk. With almost no effort, you can grow your own pot of money, and at the same time help to solve all manner of social challenges.”
If you’ve got a social conscience, it’s time to put your money where your heart is, and switch to an ethical bank or pension scheme!